US private-equity firm secures LDV's future

The future of about 1,000 workers was secured last night when a rescue package was agreed for the struggling van maker LDV.

The Birmingham company, famed for its Sherpa van, said the US private-equity firm Sun Capital had agreed a refinancing programme that would help develop its recently launched Maxus range of light commercial vehicles.

The package, worth an undisclosed sum, means production of Maxus will restart gradually next week, although LDV will phase out older product ranges.

The company was widely thought to be on the brink of collapse after it wound down production in the past two weeks and sent home many workers. LDV said its future was through the continued growth and development of its Maxus range and that it had decided to phase out older ranges. It said: "Maxus will progressively recommence next week while the Convoy and Pilot ranges will cease."

The financing package will enable LDV to speed up its new model development programme with a range of minibuses to be introduced next year. The business is will now be majority owned by Sun Capital.

LDV was formed in 1993 through a management buyout of the vans division of the collapsed Anglo-Dutch truck maker Leyland DAF. It is one of the last surviving UK-owned vehicle makers and employs 1,000 staff at a factory on a site near the M6. LDV makes more than 13,000 vehicles a year for the private and public sectors, bringing in an annual turnover of £200m.

Backers including the private-equity firm 3i and Barclays and Lloyds TSB are believed to have invested £500m in the business in recent years. This helped it launch the Maxus van.

The Transport and General Workers' Union welcomed the rescue package. Its general secretary Tony Woodley said: "This is great news before Christmas for LDV workers and the West Midlands. Management, the Government and unions have worked tirelessly to help the company during obviously difficult times. LDV is a good, modern plant managed by good people with a good product and a good workforce. They deserve the future that has hopefully been secured."