Geely exec says unaware of talks with UK taxi firm on cash injection

Reuters (Beijing) - A senior executive at China's Geely Automobile Holdings Ltd said he was unaware of talks on a possible cash infusion into struggling taxi manufacturer Manganese Bronze Holdings PLC.

Manganese Bronze was expected to discuss a cash injection with Geely, which owns around 20 percent of the taxi maker, the Sunday Times newspaper reported, as the British firm said it had no income stream for the foreseeable future after discovering a safety flaw in its new model.

Lawrence Ang, an executive director of Geely, China's 10th-biggest carmaker by sales, said on Monday he was not aware of recent communication between the firms about that matter.

In 2006, Geely paid 53 million pounds ($85.26 million) for a 23 percent stake in Manganese Bronze and 52 percent of a Shanghai-based joint venture with the firm, but in 2008 took a charge of 100 million yuan ($15.96 million) to write down that investment.

Manganese Bronze, which makes London black cabs, suspended trading in its shares on Friday and said its financial position was unclear after it discovered a safety defect in its new TX4 model that led to a recall and halt in sales.

"Geely is only a minority shareholder in the company and we have made provisions for the investment in our books years ago," Ang said.

"Our CEO and myself used to sit on Manganese Bronze's board but we've cut down to only one non-executive member now," he said.

Manganese Bronze, which has built more than 100,000 black cabs at its Coventry plant in Britain since 1948, turned to Geely in 2006 in response to high manufacturing costs which limited its growth.

Manganese Bronze has reported losses since 2008, and sales of London-style taxis in China have failed to take off.

In the first nine months of this year, Geely sold only 710 Chinese-made black cabs, around 0.2 percent of its overall sales during the period, Ang said.

Geely, whose parent company also owns Swedish car maker Volvo, now holds roughly 20 percent Of Manganese Bronze, worth 610,000 pounds, according to Reuters calculations based on the British company's closing price of 10 pence per share on Oct. 11, its last trading day.