|The black cab becomes much less safe:
London's black cabs to be built in China
Mainland's biggest private carmaker in US$100m deal
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The iconic black taxi
Zhejiang Geely Holding Group, the largest private carmaker in China, plans to buy a 23 per cent stake in the maker of London's black taxis as part of a deal to set up a US$100 million venture with the UK company to make the vehicles in Shanghai.
Zhejiang Geely, the parent of Hong Kong-listed Geely Automobile Holdings, will pay £14.25 million (HK$210 million) for the stake in London-listed Manganese Bronze and secure a 62.4 per cent stake in the joint venture for £38.4 million. Manganese Bronze will own a 37.6 per cent stake for £14.25 million, giving a combined venture investment of almost £53 million.
Manganese Bronze, which is seeking to cut costs and boost sales, has the right to buy shares in the venture from Zhejiang Geely for £6.6 million to increase its stake to 50 per cent at any time over the next five years.
"The joint venture will provide Manganese Bronze with a low-cost manufacturing base, which should increase the appeal to new markets outside China and allow rapid access to the large and fast-growing Chinese vehicle market," the company said yesterday.
The venture will produce about 20,000 vehicles a year, starting in the middle of 2008, Manganese Bronze said.
Zhejiang Geely will sell the cars in Asia and Manganese Bronze will sell them in the rest of the world.
Zhejiang Geely will fund its investment in the form of cash and land in Shanghai valued at £9 million.
Manganese Bronze's contribution will be met by licensing intellectual property rights, valued at £5.6 million, and issuing 5.7 million new ordinary shares, or 23 per cent of its enlarged issued share capital, to Zhejiang Geely at £2.50 a share.
The share valuation represents Manganese Bronze's average share price for the past six months.
Manganese Bronze has made more than 100,000 taxis since 1948. Zhejiang Geely has an annual production capacity of 250,000 vehicles.