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PwC administrators sell London black cab maker

Administrators manage to rescue black cab maker through a sale to Chinese-backed business Geely UK

01 Feb 2013 Accountancy Age

By Rachael Singh

Taxi

PWC ADMINISTRATORS have managed to sell the iconic black-cab manufacturer Manganese Bronze.

Matthew Hammond, Tony Barrell, Ian Green and Mike Jervis, all in the restructuring division at PwC, were appointed joint administrators in November last year.

The administrators announced they completed the deal to sell the principal assets, such as the brand name, unregistered vehicles and the entire fleet within subsidiary London Taxi Company as well as shares of parent business Manganese Bronze, to Chinese-backed business Geely UK. It is a newly created subsidiary of Xhejiang Geely Holding Group.

Hammond said: "The last three months has seen an extensive search for a buyer, an accelerated successful programme to return the small number of vehicles affected by last autumn's recall quickly to cabbies in London and across the UK, and the readying of new vehicles for a return to the market.

"I am delighted to announce the completion of this deal which secures a future for the Coventry-based manufacturer of the iconic black cab. It is great news for London black cab drivers and operators, for the employees across the dealerships and in Coventry, and for the suppliers that have supported the business. All current MBH and LTI employees will be transferred to the new company."

Manganese faced a number of issues in recent years, with the administrators confirming it has been making losses for the last four. However, the final nail in the coffin came when the company had to recall cabs after discovering a steering fault and suspended sales, which immediately hit its cash-flow.

The company also discovered a £3.9m accounting black hole last August. It put the accounting error down to a failure to transfer a number of transactions into a new IT system, causing the business to overstate stock and underestimate liabilities.

Earlier this month, the administrators oversaw completion of repair works needed to rectify the steering fault in the black cabs.

As well as having to repair recalled cabs, Manganese Bronze also had more than 500 new unregistered vehicles in stock that needed to be fixed. 

Visitor comments

London taxicab sale

Good luck to the London taxicab, and for its future. Unfortunate that no British buyer was prepared to put the £11.4m necessary to acquire the company: that money would not buy the tooling for a new vacuum cleaner, let alone another British icon bought for peanuts. I read that the buyer was the biggest creditor, and their initial almost 20% stake put them in a strong position. Defective steering boxes took about 400 cabs off the road, and stopped LTI - where were they made? Accountants should know more about the importance of good engineering, everywhere.

Posted by David Myers, 01 Feb 2013

 

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