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6 May, 2009 17:15

LDV Vans sold to Malaysians as Deripaska restructures

Russian tycoon Oleg Deripaska has found a new owner for the nearly-bankrupt UK van maker LDV, with Malaysian automobile producer, Weststar, stepping in at the 11th hour.

The assembly line of Britain's LDV has been shut since December – when Russia's GAZ group decided to sell the troubled company. LDV was due to go into administration on Wednesday. That could have meant possible bankruptcy or liquidation, but the van-maker was offered a lifeline of £5 million from the British government late Tuesday.

Now GAZ is in the final stages of transferring ownership of LDV to Malaysia's Weststar investment group, according to LDV Marketing Director, Guy Jones.

“Whilst a sale has been agreed, it will take another few weeks to complete and the loan from the government is to enable this process to continue and for the business to continuing operating as this happens.”

LDV's debts total around $20 million. That pales in comparison to the overall debt of GAZ Group – which some analysts have estimated to be near $1.5 billion.

Over the past year, owner Oleg Deripaska's business empire has lost some $24.5 billion in value. He is currently in debt restructuring negotiations with banks and looking for additional finance for his companies. Metropol analyst, Mikhail Pak, says getting LDV off his books isn’t going to do much for his overall position.

“If we try to compare these assets of LDV, for example, with the whole empire of Deripaska, it's just a drop in the ocean.”

LDV has narrowly avoided a fatal crash. It remains to be seen whether some other struggling businesses in the Deripaska empire will be so lucky.