Losses racked up at taxi maker before adminThe full extent of the losses incurred by Coventry taxi manufacturer Manganese Bronze have been revealed in a new report by the company's administrators. The business owed creditors more than £50m when it entered administration with the level of repayment now dependent on a sale of the company as a going concern.
A report from PwC has shown that Manganese Bronze Holdings had made operating losses of £4.3m in the nine months to September on sales of £48.6m.
The losses in 2012 came after it shortened its losses in 2011 as export sales hit record highs. Revenue in the year to 31 December 2011 increased 7.8 per cent to £75m, compared with £69.6m in the previous 12 months. Pre-tax losses fell by 58.3 per cent from £6.3m to £2.6m.
However, the company has been loss-making for a number of years, and coupled with accounting errors, supply chain issues and the steering wheel fault which led to the taxi recall, Manganese Bronze was forced to call in administrators from PwC in October 2012. More than 150 of its workers were made redundant, with 99 at the Coventry headquarters.
PwC has now secured funding from Lloyds UDT, a part of Lloyds banking Group, to fix the steering fault in the recalled cabs and allow a sale of the group to be pursued. Work is expected to be completed on the vehicles by 14 December 2012, with more than 200 of the taxis fixed so far.
The administrators also revealed it has reached the second stage of the sale process for the company after receiving a number of indicative offers from potential buyers. It is expected any sale would take another three-to-six weeks to complete because of the size and complexity of the business, the report added.
LTI Ltd, which traded as The London Taxi Company and is the manufacturing arm of the group, owed unsecured creditors £53.7m at the time of the administration, according to the report.
This includes £17.8m to a sub-brand of Geely – Manganese Bronze's Chinese joint venture partner – and a £14.3m deficit in the pension scheme.
Unsecured creditors of the ultimate parent of the group, Manganese Bronze Holdings, also totalled £19.1m, but this also included the pension deficit.
The figures do not include Manganese Bronze Property Services Ltd, its property investment management subsidiary, or Manganese Bronze Services Ltd, which operates in the group's vehicle services division. Both subsidiaries owe unsecured creditors more than £2m.
How much these creditors will be left out of pocket now depends on whether a sale can be completed.
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