Two ways for LDV

GAZ is negotiating the sale of a car plant that is facing bankruptcy

The first victim of the crisis among British automakers may be the LDV Group plant, which produces mini-trucks and minibuses and is part of Oleg Deripaska’s Russian GAZ group. Yesterday the company announced that it had filed for bankruptcy due to difficulties with financing. “Over the past weeks, the global economic crisis has forced us to operate under exceptional conditions, and we cannot continue to exist forever without funding,” LDV executive director Evgeniy Vereshchagin said in a statement.

As Elena Matveeva, deputy board member of the GAZ group, told Vremya Novostey, on May 6 the LDV application will be considered in a British court. At the same time, GAZ continues negotiations on the sale of the asset to a foreign investor. According to a Vremya Novostei source familiar with the situation, it will most likely be the Malaysian trader and importer of Weststar cars, who will try to purchase the plant before May 6 in order to avoid an increase in the expected price due to legal costs. 22 million pounds sterling - this is the amount for which the GAZ group acquired the asset in July 2006 from the investment fund Sun Capital and, as a source familiar with the situation explained to the newspaper, “it is unlikely to change significantly.” In the meantime, the company's employees are ordered not to come to work - their salaries were paid as of the end of last week, and the company cannot guarantee new payments.

LDV is part of the GAZ group, controlled by Oleg Deripaska. The company employs about 850 people. In December 2008, the plant’s conveyor belt was stopped, as a decrease in the company’s income led to the enterprise’s inability to cover costs and threatened the layoffs of not only the employees of the plant itself, but also 1.2 thousand employees of the dealer network, as well as 4 thousand employees of the companies. factory suppliers. Thus, in the fourth quarter of 2008, the decline in the commercial vehicle market in the UK was over 40%. In 2009, the market decline continued, and the decline in LDV sales amounted to over 70%. “The volume of financial revenues from sales is insufficient to continue the operating activities of the enterprise and pay debts to suppliers (debt figures are not disclosed due to a moratorium on information on financial activities, the disclosure of which will be the prerogative of the appointed administrator), which became the basis for LDV management to submit an application for the procedure administration," GAZ said in a statement.

The UK government previously refused direct financial injections to help the car plant. Chairman of the Board of Directors of GAZ Erik Eberhardson then said that LDV could be saved and the best way out in this situation, according to him, would be a buyout of the company by management. But the deal never took place. Information also appeared on the market about interest in the company from two foreign investors, but it has not yet received proper development.

As stated in the GAZ message, the company planned to ensure an increase in sales of LDV products by localizing the production of the Maxus car in Russia. The project was planned to start in the second half of 2008, but the financial crisis and unavailability of credit resources forced the company to reconsider the priorities of investment projects, and the rise in exchange rates made the project of assembling cars in Russia economically unprofitable until a deep level of localization was achieved. As the company explains, in 2008, GAZ considered this project as the initial stage of introducing into production a new generation light commercial vehicle, the Gazelle-3. In 2009, it was planned to build a new complex at the Nizhny Novgorod site for the production of various generations of modern LCVs: in the medium term - Maxus cars, in the long term - Gazelle-3. However, due to the refusal to begin work on the localization of Maxus in 2009, the company decided to focus on developing the Gazelle-3 without using the Maxus platform. GAZ plans to introduce the Gazelle-3 car into production on a platform that will be valid until 2020, and is considering the possibility of postponing the date of the Gazelle-3 market launch from 2012 to 2011.

However, as Ms. Matveeva told Vremya Novostei yesterday, “the GAZ group retains the right to produce and sell Maxus cars in Russia and the CIS countries and may further consider the feasibility of producing Maxus cars in Russia depending on market needs.”

Irina TSYRULEVA