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LDV forced back into administration

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A Malaysian company has pulled out of a deal to rescue the beleaguered LDV, forcing the van maker into administration.

Weststar announced last month that it was in talks to buy the Birmingham-based firm, which employs 850 workers, with many more dependent on the business.

But now the future of thousands of jobs is uncertain as the takeover suddenly stalled after Weststar failed to raise the funds necessary for the purchase of LDV, which is owned by the Russian corporation GAZ.

Union representatives and business leaders are concerned over the implications the collapse will have for workers.

Production at LDV stopped in mid-December after a sharp fall in demand for vans.

The firm withdrew its application for administration in light of the possible Weststar deal and a £5 million Government bridging loan.

It has now been forced to reapply for administration after funds to keep the business going were not made available.

An administration hearing will be held in Birmingham next week, where the future of the workers and the firm will be decided.

© Press Association 2009