Leyland DAF deal 'in its final stages': Hopes rise for conclusion soon as MBO team examines offers of funding from City

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The Independent Online
THE MANAGEMENT team negotiating the buyout of the Leyland DAF truck plant in Lancashire said yesterday it hoped to conclude a deal with the receivers by the end of the month.

John Gilchrist, managing director of the Leyland assembly plant, said the management bid was entering its 'final stages' and that several offers of funding from City institutions were under examination.

The fact that the buyout team and the receivers, John Talbot and Murdoch McKillop of Arthur Andersen, have begun formal negotiations further raises hopes that the Leyland plant will be kept alive, safeguarding 1,100 jobs.

The management team is bidding jointly with Lancashire Enterprises to buy the entire 230-acre site at Leyland. The buyout team would take charge of truck manufacturing while Lancashire Enterprises would develop the remainder of the site into a business and technology park.

Mr Gilchrist said: 'Our joint bid should not only give the truck business a future but also contribute to regeneration of the important Leyland site with the job prospects which that would bring.'

The buyout team has already secured a letter of intent from the new Dutch truck company, DAF Trucks, agreeing to continue taking supplies of light trucks from Leyland.

But the future relationship between the assembly plant and Leyland DAF's African subsidiaries is less certain.

The receivers are in discussions with several parties interested in buying Leyland's profitable assembly operations in Ghana, Malawi, Tanzania, Uganda, Zambia and Zimbabwe.

Mr Gilchrist said: 'The future of the African companies, while of great interest to us, is not in any way critical to our plans'.

The six African subsidiaries assemble between 500 and 1,000 Leyland trucks a year out of knock-down kits shipped from Britain. Mr Gilchrist said he hoped this would continue whatever happened to their ownership.

Meanwhile ABN Amro, DAF's lead banker, is facing legal action from bondholders over its role in the refinancing of the company last year before the collapse of DAF two months ago.

Holders of 150m guilders (pounds 84m) of guaranteed bonds are suing the Dutch banking group and its 50 per cent-owned subsidiary, Nederlandsche Trust, for failing to represent their interests in the restructuring.

Gary Klesch, the debt trading expert who is advising the bondholders, said that in the restructuring the banks were given further security over the assets of DAF's operating companies.

This, he said, contravened the terms of the bond issue, which stated that the bonds would have the same claim over assets as the banks. The bonds now trade at just 6 per cent of their face value.

Mr Klesch said Nederlandsche, the trustee for the issue, would be sued for not keeping bondholders informed and ABN, which led the bond issue, for issuing a false prospectus and for showing preference to itself and other creditors ahead of the bondholders.

ABN Amro has said it acted in good faith and would defend the action.

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