Taxi maker hit as Geely rethinks

SHARES in taxi maker Manganese Bronze reversed 11 per cent yesterday after the firm behind the iconic black cabs revealed that its Chinese joint venture partner had pulled out of financing plans that would have seen the foreign firm take a controlling stake.

Chinese company Geely - which already owns 23 per cent of Manganese - had been in lengthy talks over a share placing to provide Manganese with financing in return for a 51 per cent stake.

The move would have given Manganese cash to expand, although the firm stressed its international growth plans would remain on track.

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Manganese added that the Chinese joint venture, the Shanghai LTI Automobile Components Company, would not be affected.

John Russell, chief executive of the UK taxi maker, said: "We look forward to our continuing co-operation with Geely.

"The decision not to proceed with the placing should not affect the future of our joint venture or international expansion plans."

Last month, Manganese said that it is likely to remain in the red for the rest of this year amid "challenging" trading conditions.

Despite a strong first quarter, sales of London taxis reversed 29 per cent year-on-year between April and June as airports shut due to Iceland's volcanic ash cloud.