Manganese Bronze again dismisses talk of Chinese takeover
LONDON taxi maker Manganese Bronze has again denied talks of a possible offer for the group by its Chinese partner Geely.
The announcement comes after Geely agreed to extend credit terms to the Coventry company to enable it to continue producing vehicles in the country.
Investors reacted well to the news and the company’s share price was up almost 5% in early trading.
Manganese Bronze said that as part of its continuing relationship with Geely, the group had agreed a 120-day extension of credit terms for money owed by the British firm to Chinese subsidiary Shanghai LTI Automobile Company Ltd (SLTI). The money is owed for the supply of parts and components to Manganese Bronze.
Geely has also granted a 120-day extension for money due from Manganese Bronze to Shanghai Maple Automobile Company Ltd relating to the distribution and sales of completed vehicles outside Asia.
In a statement, John Russell, Manganese Bronze chief executive, said: “The extension of trading terms by SLTI demonstrates the support that Geely is willing to provide to Manganese Bronze in these challenging economic times.
“We will continue to work with the Geely Group on initiatives to develop and improve the taxi business but we can re-affirm that the group is not in discussions with Geely regarding any proposed placing or offer for the group.”
Manganese Bronze revealed that UK sales in the fourth quarter of last year were broadly flat against 2009 at 384 vehicles as against 382 the year before.
Sales for the year to December 31, 2010 – 1,653 – were down by 71 units from 2009 but did recover in the second half from the shortfall of 137 units caused by the ash cloud in Q2.
International sales, stood at 226 by the year-end and the group said this was due to the negative impact caused by a lack of financing, although the firm said interest in the vehicle remained strong.
A revised TX4 model range was launched in November, assembled in the re-structured Coventry factory and using the lower cost bodies and components imported from SLTI.
The operating profit margins for these vehicles is higher than for the previous UK-manufactured model. Manganese said these were in line with its expectations and it was hopeful of a return to profit in 2011.
In its statement, it said: “The board is of the view that the results for the financial year ending December 31, 2010 are in line with market expectations, and is confident that, with the extension of credit terms from Geely, the continued support of the group’s bankers, and the improved operating profit margins, the group is well positioned to return to profitability in 2011.”
