Financial position of London taxi maker unclear amid recall
Manganese Bronze Holdings plc, the maker of London’s iconic taxis, suspended trading in its shares on Friday and said its financial position was unclear after it discovered a defect in its new TX4 model that led to a recall and halt in sales.
Manganese Bronze said it recalled about 400 TX4 London taxis after it found a defect in a steering box that was introduced in February.
“The suspension of sales will have a very material and detrimental impact on the group’s cash flows and the board is working to establish the options available to the business given the impact on working capital,” the company said in a statement.
Manganese Bronze, which is 20 per cent owned by China’s Geely Automobile Holdings Ltd, said it was working with Geely to put in place a solution for the steering box faults.
“We’re not a in a position yet to give a view as to what it will cost us to fix it, nor can we make an estimate of what the cash impact will be,” chief executive John Russell told Reuters.
“We need to work our way through to the technical solution and then get a sense of how long that’s going to take and we can make the judgements on both the profit effect and the cash effect but that’s going to take us some time,” he said.