LDV, the struggling vanmaker owned by Oleg Deripaska, the Russian billionaire, is offering vans to creditors to offset its debts.

The Birmingham-based business, which has told the Government that it is on the brink of collapse, is offering the vans to dealerships and a few other suppliers as part-payment on the money it owes them.

A spokesman for LDV played down the move, saying that the use of vans for payment was “accountancy practice where we have some money owed”.

News that LDV was using vans as part-payment emerged as pressure grew on the Government to help the vanmaker to survive. The company, which was bought by Mr Deripaska in 2006, can no longer depend on support from Gaz, the Russian automotive group that is part of Mr Deripaska's Basic Element investment empire.

Additionally, LDV is facing a bill of nearly £1 million for national insurance contributions for its 500 employees as it tries to secure life-saving loans from the Government.

So far ministers have suggested that LDV attempts to get more finance from Gaz. However, a spokesman said yesterday that Gaz was unable to provide more funds.

LDV has been in contact with the Government for several weeks but sources at the vanmaker said that it was growing increasingly frustrated because ministers and officials kept trying to bat the issue back to Gaz.

LDV's renewed pleas for urgent help came as further talks began over the future of General Motors Europe. Karl-Theodor zu Guttenberg, the German Finance Minister, is in the United States to talk to GM leaders about plans for Opel/GM Europe. GM has told European governments, including the UK, which is host to the Vauxhall car and van factories, that the European division cannot survive without government money. It is believed to have enough cash to survive only until the end of next month.

The Society of Motor Manufacturers and Traders said that a poll that it had commissioned showed that the British public backed the idea of cash incentives to scrap old cars and buy new ones. The Government is believed to be considering a scheme to offer up to £2,000 per old car.

SOURCE: TIMES -- 17 March 2009
Christine Buckley, Industrial Editor