Hail a cab: Chinese auto maker to buy London taxi maker
Geely Auto, the Hong Kong-traded unit of Zhejiang Geely, currently owns 19% in the cab maker and plans purchasing the remaining stake, two people familiar with the matter told Bloomberg. However, they refused to say how much the Chinese company offered for MHB’s stake. With a purchase of the cab maker Zhejiang Geely, which already owns Swedish car maker Volvo, plans to speed up overseas expansion.
Manganese Bronze was hit by a string of problems in recent years, including accounting errors, ongoing losses, and finally the recall of 400 of its world-famous black cabs. On October 30 it went under creditor protection after the tie-up with Geely Auto failed to improve the financial situation. According to the Pricewaterhouse Coopers consulting firm MHB creditors are owed more than £50mn.
Geely Auto and Manganese Bronze created a cab-making joint venture in 2006 in order to bring down costs of producing the London taxis. Under the deal, MHB bought components from Geely Auto to assemble cabs in the UK, while Geely Auto could produce export models in Shanghai.
Chinese investors are not new to purchasing struggling European companies. Earlier this year Chinese investors purchased the elite Chateau Bellfont-Belcier vineyard in the Bordeaux region of France for reported 2bn euro. In August the castle and vineyard of Gevrey-Chambertin in the Burgundy region was sold for over $8 million to a Chinese businessmen, RFI reports. The deal caused outrage among some French politicians who are concerned the country is selling its wine heritage.