Maker of Iconic London Taxi Declares Insolvency

Manganese Bronze Holdings plc, maker of London's famous black taxi, has filed for court administration after a failure to raise fresh capital left it insolvent. The action is similar to a U.S. bankruptcy.

The Coventry, England-based company was unable to negotiate the 10 million- 15 million ($16-$24 million) loan it expected from Zhejiang Geely Holding Corp. The Chinese automaker, which owns 20% of Manganese, is now considered a leading candidate to buy the company.

The cab maker has lost money for the past four years. But analysts say the collapse was triggered when a defective China-made steering box forced Manganese to suspend sales and recall 400 taxis, thus cutting off its cash flow.

The company has been using more parts from China to save money but has alienated customers with the vehicle's shoddy quality and outdated engineering.