Geely in running to buy stalled London cab firm
Mainland carmaker tipped as front runner to acquire debt-laden taxi manufacturer struggling with compensation payouts linked to recall
Mainland carmaker Zhejiang Geely may buy out its London taxi manufacturing partner Manganese Bronze for less than £2.7 million (HK$33 million), a person familiar with the talks said.
Zhejiang Geely, the parent company of Hong Kong-listed Geely Automobile, proposed a deal to Manganese Bronze last month to buy out the remaining 80 per cent stake of the company, according to the person.
Manganese Bronze entered administration in October last year after failing to secure funding for its survival.
But the person said the offer could go well below £2.7 million - the last valuation of the company by its administrator PricewaterhouseCoopers - given the heavy debt it carried.
Manganese Bronze, manufacturer of the iconic London black taxi, faced a huge compensation payout after the company recalled 400 of its £35,000 TX4 taxis because of a fault in their steering boxes in October.
Zhejiang Geely, which owns 20 per cent of the company that was once listed in London, was among other bidders for the acquisition.
But Chinese media reports said Geely stood the highest chance of success given the pair's long-term partnership. Geely and Manganese Bronze formed a joint venture in 2006 to migrate part of the London taxi production line to Shanghai.