From Financial Times
By Jonathan Guthrie in Birmingham and John Burton in,Singapore
LDV, the troubled Birmingham vanmaker, asked a local court yesterday to suspend administration proceedings as hopes grew that it could be rescued by Weststar, a little-known company with ties to the Malaysian government and military.
The judge requested further information on the takeover deal, which the UK government is supporting with a £5m four-week bridging loan. The move to put the company into administration is expected to be cancelled in a couple of days, giving Weststar time to complete due diligence on LDV.
The government loan is conditional on manufacturing staying in the West Midlands. But the rescue attempt was greeted circumspectly by LDV’s 850 workers, who are inured to false dawns. One told the Financial Times: “It looks like good news on the face of it but we need to see what the concrete details of this takeover will be.”
Jerry Blackett, of the Birmingham Chamber of Commerce, also struck a note of caution. He said: “Suppliers who may be nursing unpaid debts will be cautious about retooling and supplying again.” He welcomed the emergence of Weststar as a rescuer for LDV but added: “It is surprising that a last-minute buyer would not prefer to purchase the firm out of administration, given the potential to wipe out past corporate debts.”
Senior executives from Weststar arrived in London yesterday for talks with the government, LDV and GAZ, the Russian automotive group owned by oligarch Oleg Deripaska that is selling the vanmaker.
Weststar is almost as low profile in Malaysia as it is in the UK. When Syed Azman Syed Ibrahim, Weststar’s main shareholder and managing director, suddenly emerged at the centre of controversy over lucrative car import licences in 2005, several leading Malaysian newspapers mistakenly published the picture of another man.
Mr Syed Azman has been used to living in the shadows, having served as a high-ranking military intelligence officer for 13 years before starting Weststar as an importer of foreign cars in 1994.
He acquired highly sought licences for importing Honda and Chevrolet cars that allowed Weststar to avoid paying punishing tariffs protecting Malaysia’s car industry. Weststar also operates helicopter and private jet charter services.
When it was revealed in 2005 that Mr Syed Azman held among the largest number of import licences, it provoked criticism that those who had close links to the government appeared to be among the biggest beneficiaries of the licence system.
One of those involved in Weststar at the time was Azzuddin Ahmad, the former head of military intelligence. Mohamad Haniff Abdul Aziz, a former official of the Ministry of International Trade and Industry, the agency that issued the car import licences, is also a Weststar minority shareholder.
Vanmaker’s rocky road
1993 LDV’s parent, Leyland Daf collapses; managers buy LDV for £8m with backing from 3i
2000 Daewoo, LDV’s South Korean partner, collapses, delaying the launch of a new range of vans
2005 Sun Capital Partners, a US investor, buys LDV out of administration for an estimated £75m
2006 GAZ, the Russian automotive group, buys LDV from Sun Capital Partners
2008 December LDV suspends production after van sales slump
2009 February Buy-out team requests £20m-£30m loan from government to restart production March Buy-out team cuts its loan request to £4m-£5m
April 30 LDV announces it will enter administration on May 6 May 5 GAZ agrees to takeover of LDV by Weststar of Malaysia Government offers a ‘one-off’ four-week £5m bridging loan
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