Manganese Bronze set to shed components division

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The Independent Online

Manganese Bronze, the manufacturer of the familiar London black cab, is poised to dispose of its loss-making components division.

Manganese Bronze, the manufacturer of the familiar London black cab, is poised to dispose of its loss-making components division.

An announcement is expected this week, possibly as early as today, after Manganese Bronze yesterday confirmed that it was in talks "regarding possible transactions".

The statement was prompted by a sharp rise in the Manganese Bronze share price. Since the start of the week the stock market value of the company has risen by 22 per cent and yesterday the shares rose by a further 6.5p to close at 85.5p.

Manganese Bronze began a review of its components division, which includes a metals sintering business and a manufacturer of bus interiors, in March and also announced plans to lay off 13 per cent of its 400-strong workforce. The review followed a first-half loss of £1.6m. The components division accounted for £800,000 of the loss.

At the time, Ian Pickering, the company's chief executive, said: "A detailed review of loss-making businesses is being performed and we plan to either close or make selective disposals of peripheral activities as appropriate."

Since then the company has beat off an unwanted takeover bid from its former chairman and biggest single shareholder Jamie Borwick and set out a three-pronged corporate strategy. Apart from the components division review, this involves expanding its services division, which consists principally of the mobile phone taxi-hailing business Zingo, and increasing overseas sales of black cabs.

It is not known how much, if any, of the components division will remain with Manganese Bronze which has lined up more than one buyer for the parts of the business it no longer wants.

Manganese Bronze has invested a total of £8.5m in Zingo and has arranged an additional £8m banking facility to support the development of the business. It has signed up Vodafone and O2 and is negotiating with other mobile networks.

The vehicles division, meanwhile, was given a boost last month after the London Mayor Ken Livingstone decided not to loosen the rules governing licensed black cabs which would effectively have allowed minicab firms to compete more directly.

Uncertainty over the outcome of the Mayor's review has helped hold back sales of black cabs in recent months. In the 11 months to the end of June, UK sales were down by 9 per cent to 2,065 units although in the month of June, sales were up by 7 per cent to 192.

Manganese Bronze has also had some success recently in selling black cabs to the United States and Thailand in line with the company's aim of expanding its customer base.