Advertising agency is a loser in LDV debacle
Oct 26 2009 by Anna Blackaby, Birmingham Post
A Wolverhampton PR and advertising agency has emerged as one of the local firms to be left out of pocket by the collapse of LDV.
Connect Advertising and Marketing is owed £175,774 and its sister firm Connect PR is looking to recoup £44,390 following the demise of the Washwood Heath van-maker in early June with debts of £75 million.
But along with the firm’s hundreds of other creditors, Connect is set to receive paltry compensation after the administrator said earlier this week a maximum of £600,000, and possibly less, would be made available for creditors owed sums totalling many millions of pounds, meaning LDV’s former suppliers could pocket less than a penny for every pound they are owed.
But Connect brushed off the potential losses, saying it had had one of its best years and was expanding its operations on the back of a series of new client wins.
“We have been a loyal supplier to LDV for the last 16 years and our thoughts at this time are with the hundreds LDV employees who have lost their jobs,” the firm said in a statement.
Connect, whose clients include Jaguar Land Rover and Goodyear Dunlop, makes up a long list of hundreds of creditors who are set to receive “little or nothing” according to Rob Hunt of administrators PricewaterhouseCoopers.
Other creditors who have lodged claims with PwC include Dana Spicer Axle Europe of Witton, owed £684,111, law firm DLA Piper of Birmingham, owed £184,000, and Sonas Automotive of Tyseley, owed £204,989.
LDV’s secured creditors – including banks Barclays, Lloyds and HSBC – have also been warned they will not be paid in full.
The likely shareouts of less than a penny in the pound will see dozens of dealers out of pocket, including 70 new vehicle sales dealers and 160 repair, service and spare parts suppliers.
Many of the 900 former LDV workers with preferential creditor status have been dealt with under statutory Government procedures, receiving money for holiday and arrears pay.
LDV’s assets were last week sold to a new firm owned by Chinese businesswoman Dr Qu Li who plans to relaunch the vanmaker, probably at Longbridge, under the Eco Concept banner, ending a century of manufacturing at Washwood Heath.
The sale to Eco Concept raised fears that Birmingham van production could eventually be sacrificed to China in a “lift and shift” operation similar to MG UK at Longbridge, now owned by Shanghai Automotive Industry Corporation (SAIC).
Earlier this week Liam Byrne, MP for Hodge Hill, described the firm’s Chinese buyers as “asset strippers”.
Eco Concept plans to start a company producing and assembling low-volume specialist light commercial vehicles. It is hoped vehicle trials will begin within18 months.
About 200 staff are to be employed at the new business.
