Lancer's UK plants left in the cold: German group buys Bavarian subsidiary Receivers will reluctantly sell British operations on their own

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The Independent Online
THE FUTURE of Lancer Boss's British factories hung in the balance last night, following an announcement by Jungheinrich, the third biggest forklift truck maker in the world, that it had bought the group's Bavarian subsidiary, Steinbock.

Jungheinrich said in a statement that Werner Folger, Steinbock's German sequestrator, had agreed to the sale. Allan Griffiths, the Grant Thornton partner who is the British receiver, accepted that he would now have to sell the UK operation on its own, despite his belief that the two operations - which each employ between 700 and 800 people - were so closely integrated that they should be sold as one.

It is understood the receivers are deeply unhappy that they have been unable to gain control of the German operation. A Grant Thornton partner has been in Bavaria since Monday, but has been unable to stop the negotiations between Jungheinrich and Steinbock's banks, which have been pushing hard for the link-up.

'We will be looking forward to discussing with the directors of Jungheinrich future co-operation between the two companies,' Mr Griffiths said. The receivers said it was unclear whether the German group was interested in buying the UK operation.

The factories in Bavaria and Leighton Buzzard supply each other with parts and produce complementary vehicles. When Steinbock Boss was placed in administration last Friday, the UK directors decided it would be impossible to keep the British company running on its own, and called in Grant Thornton.

Sir Neville Bowman-Shaw, Lancer Boss's chairman and largest shareholder, has accused Jungheinrich and Steinbock Boss's banks of using strong-arm tactics to force the German sale. He said the banks refused to release funds to pay salary cheques unless he agreed to sell to Jungheinrich for a nominal sum and it was his rejection of this proposal that had led to the collapse.

Until yesterday Grant Thornton was in discussion with a number of companies interested in buying the whole group. Two management buy-in teams backed by financial institutions - one believed to be the Prudential - were in the final stages of 'due diligence' investigations before the receivership, and expressed renewed interest after it. Mr Griffiths said on Monday he would be able to sell the group 'quite quickly' if he had control of the German operation.

The receivers have been talking to potential buyers this week, but will now switch their attention to establishing supply and distribution contracts that will allow the Steinbock and Leighton Buzzard factories to operate as they have been. If they succeed, they believe they may still be able to sell the Leighton Buzzard factories as a unit. They say, however, that the value of the British operation is much lower than it would be with its Bavarian twin, and it may be impossible to keep the British factories running. The most desirable parts could be sold off separately.

Lancer Boss has been on the market for more than a year, and has been in effect run by bank appointees for the past six months. Komatsu, the Japanese engineering concern, came close to taking a majority share last summer, and in October the German bank IKB installed Ludwig Schneider, a company doctor, as chief executive. The group's losses had risen sharply, in part because an Italian acquisition had gone badly wrong.

Mr Schneider was replaced by a British bank appointee, Charles Whyte, in February, following concern that the German was concentrating too hard on selling the company to Jungheinrich. Mr Whyte is an engineer who used to work for Walter Somers, which built the Iraqi Supergun: he was responsible for telling the group's chairman that the 'oil pipe' was not what it was claimed to be.

Industry sources say that Jungheinrich continued to negotiate with Steinbock's German banks, without the British group's knowledge, and that it made them an offer for the whole group on 18 March. This was so low that it was rejected on 24 March. Jungheinrich returned with a nominal offer for Steinbock alone on 30 March.

The German group decided to force Sir Neville's hand apparently because it was concerned that if Steinbock Boss's future was not settled before next week's Hanover Fair, it would lose all credibility.

(Photograph omitted)

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