Control of Manganese Bronze to pass to Geely

Black cab maker Manganese Bronze is to cease production of bodies and chassis at its Coventry plant with the loss of 60 jobs and shift production to China.

The group is also considering a further fund raising to fund vehicle assembly less than a year after it raised £9.4m after heavy losses in 2009 and more losses forecast this year.

Chinese partner and 23% stakeholder Geely will subscribe for new shares at 70p to provide the funds, which will give it a controlling stake in the taxi maker. Geely also owns 51% of the two companies' joint venture Shanghai LTI.

"An equity placing to Geely will fully cement our relationship, enhance the group's capital base and see the potential for the group to expand into the assembly and distribution of Geely vehicles," John Russell, Manganese chief executive, said.

Losses in 2009 came in at £7.3m against £14.2m, but stripping out one-off costs, the deficit rose slightly to £7m. Revenues fell to £73.1m from £77.2m.

The number of vehicles sold fell to 1,933 from 2,124 with sales in the UK seeing the largest fall. UK taxi sales fell to 1,724 from 1,951.

"The direct and indirect opportunities arising from our Chinese joint venture give the group confidence to endure what we believe will be a continuing difficult UK market in 2010," the firm said.

Sales in the first quarter are proceeding to plan, it added. "The projects and initiatives to return the group to profitability are making good progress. The timing and full implementation of these, taken together with exceptional initial costs, mean the Group is unlikely to be profitable in 2010," it said.

The group is also switching its listing to Aim from the main market.