Geely pulls plug on Manganese Bronze
SHARES in London taxi manufacturer Manganese Bronze plunged this afternoon after the group’s Chinese partner Geely Automotive Holdings announced it was pulling out of a proposed share placing.
No reason for the move has been given and while the Coventry firm said the withdrawal would not affect working capital levels for at least 12 months, investors were not so confident.
Manganese Bronze, which earlier this year issued a profits warning due to the poor sales performance, had proposed the share placing to generate cash to support the business. The move would have seen Geely – which last week acquired Volvo from Ford – become the group’s majority shareholder.
Geely already manufactures body panels for the firm following Manganese Bronze’s decision to end production at its Coventry plant and switch to an assembly operation instead. The move is designed to reduce the costs of the completed vehicle by around £1,500.
Geely is also working to build a version of the cab for sale in Asia.
In a statement to the London Stock Exchange, the Coventry firm said: “Manganese Bronze has been informed that the board of Geely Automobile Holdings has decided not to proceed with the Proposed Placing.”
It said Geely had confirmed its commitment to the joint venture with Manganese Bronze – Shanghai LTI Automobile Components Company – and that future operational plans remained unaffected.
“SLTI will continue to supply Manganese Bronze with components for its UK manufacturing operation as well as producing lower cost London taxis for international sale,” it said.
The statement also contained a reassurance from Manganese Bronze’s board that it had “no reason to believe that the working capital available to it or its group will be insufficient for at least twelve months from the date of its admission to trading on AIM”.
The company said it remained well positioned to continue with its international expansion plans.
John Russell, Manganese Bronze chief executive, said: “We look forward to our continuing cooperation with Geely. The decision not to proceed with the placing should not affect the future of our joint venture or international expansion plans.”
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