The directors of beleaguered vanmaker LDV have applied for administration, raising fresh fears that hundreds of workers will lose their jobs. The Birmingham-based firm has not built any vehicles since last year after its Russian owner Gaz decided to sell the business.
A planned management buyout failed to materialise and the company has been trying to raise money from overseas investors for the past few months.
Chief executive Evgeniy Vereshchagin said in a letter to workers: “Despite all our efforts over the past few months, we have so far been unable to secure the investment required for the business.
“During the past few weeks, the global economic crisis has forced us to operate in exceptional conditions and we cannot continue in this position without funding indefinitely.
“We are still working with potential overseas investors who want to keep production in Birmingham, but they, like many people at this time, are finding it difficult to secure the necessary funds.
“We must now inform you that the deterioration in the position of the business has forced the directors to apply for administration. I must stress that this does not mean the business is in administration yet.”
The application will be processed on May 6 and the company said it has until that time to secure funding for its plans.
Workers have been paid up to the end of last week but the letter said the company was unable to confirm any further payments.
LDV, which employs several hundred workers, is owned by Russian oligarch Oleg Deripaska.
Source: Press Association