LDV bosses apply for administration

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The Independent Online

The directors of beleaguered vanmaker LDV have applied for administration, raising fresh fears that hundreds of workers will lose their jobs, it was revealed today.

The Birmingham-based firm has not built any vehicles since last year after its Russian owner Gaz decided to sell the business.

A planned management buyout failed to materialise and the company has been trying to raise money from overseas investors for the past few months.

Chief executive Evgeniy Vereshchagin said in a letter to workers today: "Despite all our efforts over the past few months, we have so far been unable to secure the investment required for the business.

"During the past few weeks, the global economic crisis has forced us to operate in exceptional conditions and we cannot continue in this position without funding indefinitely.

"We are still working with potential overseas investors who want to keep production in Birmingham, but they, like many people at this time, are finding it difficult to secure the necessary funds.

"We must now inform you that the deterioration in the position of the business has forced the directors to apply for administration. I must stress that this does not mean the business is in administration yet."

The application will be processed on 6 May and the company said it has until that time to secure funding for its plans.

Workers have been paid up to the end of last week but the letter said the company was unable to confirm any further payments.

"As a result of this, only the senior management team will report for work until further notice and all employees are requested to leave the site after this briefing and await further information at home.

"I want to thank you for your support to date and assure you that we will continue to fight to secure the funding and valuable jobs here at LDV up until the final deadline."

LDV, which employs several hundred workers, is owned by Russian oligarch Oleg Deripaska.

Malaysian group Weststar is believed to be the company which has been involved in negotiations to raise overseas money to save LDV from closure.

If LDV falls into administration, it will be the first vehicle manufacturer to go out of business in the current recession, although thousands of jobs have been lost in the motor industry because of plunging sales.

The vanmaker, which has its roots in the old nationalised British Leyland, has not built any vehicles since before Christmas after a slump in van sales.