Taxi Driver Online

Shares in the manufacturer of the iconic London black cab have jumped by nearly 16% after it unveiled plans to raise £9.4m to fund global expansion. Manganese Bronze said proceeds from a share placing would be used to develop new markets internationally.

It has started selling Chinese manufactured taxis in China as part of a joint venture with Geely. But tough trading conditions in its core UK market meant it needed to secure extra funding, the firm said. Shares in Manganese Bronze ended the day up 32.5 pence, or 15.8%, at 238.5p.

Manganese has agreed for its joint venture in China to make 8,000 cabs for overseas markets. And it says it is possible that in the very first year of distribution of Chinese manufactured vehicles, its international sales will exceed those sold into the UK market.

However, Manganese has seen weak sales in the UK, its core market, as the recession takes hold. "Historically, demand for Manganese Bronze's product has been an early lead indicator for economic activity and the group started seeing reducing sales volumes in 2007," it said.

"With confidence drained by the financial crises of 2008, the group reported losses for the year and sales prospects in the UK for 2009 remain uncertain."

It said that given those weaker UK sales and difficulties in accessing affordable bank lending, the sale of new shares was "the most appropriate" means of securing funding to invest in international sales.

Last year Manganese signed a deal to design and build a battery-powered taxi with no carbon emissions. It will work with an electric vehicles specialist, with the car built in the UK and launched this year.

The joint venture follows interest from several cities keen to cut emissions. But the higher cost of buying the taxi means it is only likely to take a small part of the market, Manganese says.

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Can their products get much higher?