London Cab Maker Seeks Administration as Funding Dries Up
Manganese Bronze Holdings Plc (MNGS), the maker of London’s iconic black taxis, will try to restructure its operations in administration after failing to secure the necessary money to continue production.
“Discussions with various parties to secure funding on acceptable terms to address the group’s financial needs have proved unsuccessful,” the company said in a statement today. “The board has therefore concluded that the group is no longer a going concern.”
Manganese, which has built more than 100,000 taxis since 1948, struck a deal in 2006 with Geely Automobile Holdings Ltd. (175) to buy components and body parts from the Chinese company in Asia for assembly in the U.K. The tie-up was intended to help cut costs and ensure the U.K. company’s long-term survival.
The black taxis, known as Hackney cabs because of their origin as carriages drawn by French Haquenee horses, feature 25- foot turning circles, as required by London’s Public Carriage Office in the early 20th century, to enable exits from taxi- waiting queues in the middle of the street or tight spaces such as the Savoy hotel forecourt.
Trading of the shares was suspended Oct. 12 when Manganese announced a taxi recall, prompted by a fault in the steering box. The company has forecast it will sell more vehicles this year overseas than at home for the first time, after selling 1,502 in the U.K. and 705 abroad in 2011.
Manganese shares stood at 10 pence at the close of trading on Oct. 11, before the suspension, and have fallen 69 percent this year, giving the company a market value of 3 million pounds ($4.8 million).
The automaker’s priority remains resolving the recall of 400 London taxis, the Coventry, England-based company said in today’s statement.
Geely took a 20 percent stake in the British company and holds rights to sell the black cabs in China and some other Asian countries. Manganese has planned in 2014 to introduce a new sedan-style taxi as part of the joint venture. The British company also has said it intends to serve as Geely’s distributor when the Chinese company starts exporting cars to the U.K.