Zhejiang Geely Holding Group agreed to buy Manganese Bronze Holdings and save the maker of London’s traditional black taxis.
Zhejiang Geely will offer 11.04 million pounds ($17.5 million) to purchase Manganese Bronze Holdings on a debt-free basis. Zhejiang Geely’s unit, Geely Automobile Holdings already owns 20% stake in the UK automaker, after the 2006 JV deal according to which Manganese Bronze bought China-made components and body parts. By purchasing the UK automaker and Volvo Cars in Sweden, Zhejiang Geely plans to secure its expansion.
“We are determined to restore the fortunes of this totemic marque,” Li said in the statement. “We are a long-term and committed investor and we believe the illustrious past of the London black cab can be matched by a successful and healthy future.”
Currently London has 23,000 licensed taxis and adds 1,400 new ones each year. Manganese Bronze said that it supplied more than 100,000 taxis over the past 50 years to this market which is worth about 50 million pounds annually. On October 30th, Manganese Bronze went into administration due to some defects in steering boxes, which were provided by a Chinese supplier. These issues led to a recall and even production freeze, cutting off the cash flow.