LTC parent secures £275m fundraising to support zero-emission black cabs

THE parent company of Coventry-based London Taxi Company has raised £275m ($400m) to support the development of its zero-emission cabs.

Zhejiang Geely Holding Group raised the money after issuing the first-ever Green Bond on the offshore market from a Chinese automobile company.

The senior unsecured bonds, issued through ZGH’s wholly-owned subsidiary LTC GB Ltd, carry a fixed interest rate of 2.75% per annum with a tenor of five years, which is the lowest coupon ever among the US dollar bonds issued by Greater China’s automotive companies.

Such was demand for the bonds that the final order book stood at $2.3bn – an over-subscription ratio of close to six times.

ZGH will use the net proceeds from the bond to finance or refinance the design, development and production of zero-emission capable vehicles by LTC.

A new £300m factory where the green cabs – designated TX5 – will be produced is nearing completion at Ansty Park, near Coventry.

The TX5 was officially unveiled last October in London in front of Chinese President, Xi Jinping during his state visit to the UK.

The TX5 is a zero-emission vehicle and will be launched in the UK at the end of 2017, followed by international markets in 2018. Importantly, the vehicle will meet all the tough new emissions regulations required to operate in the capital.

LTC is also working on several zero-emission model concepts, including light commercial vehicles as part of ZGH’s plans to significantly raise production at LTC and position it as a leading manufacturer of green and environmentally friendly transportation.

“We are delighted with the response of investors to our Green Bond offering” said Yifan Li, CFO of ZGH. “The issuance of the Green Bond is in line with our corporate vision to produce the safest, most environmentally friendly and most energy-efficient vehicles. The commitment of ZGH and all of the group’s brands to reduce emissions means we are well positioned to benefit from the shift towards ever greener vehicles.”

Peter Johansen, CEO of LTC, added: “We are committed to producing zero-emission capable vehicles.

“I believe the issuance of the Green Bond will further enhance our competitive edge in new energy technologies. Our next generation of zero-emission vehicles, the TX5, will be sold across the world, creating an environmentally friendly transportation system.”

Bank of China provided a Standby Letter of Credit for the Green Bond. Joint Global Coordinators included Bank of China, Bank of America Merrill Lynch, Barclays and Société Générale.

Deloitte provided independent limited assurance to ZGH in relation to the Green Bond Management Statement.