Colin Barnett reports on the latest twist in the tale
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of the contract to supply the army with 8,000 combat support vehicles.
JUST AS THE UK government was poised to reveal the winner of a lucrative contract to provide 8,000 new combat support vehicles, one of the key players has hit financial difficulties.
Mayflower Corporation, whose Mayflower Vehicle Systems subsidiary is lined up to build the cab for the Mercedes-Benz S2000 contender, declared itself insolvent following apparent problems servicing its £250m debt.
A couple of days earlier, a number of board members left amid talk of accounting problems; the firm's pension fund is also facing scrutiny.
Among those due to face questions from administrators Deloitte is former Prime Minister John Major — until last year he was a Mayflower director. Mayflower's interests include a majority stake in bus-builder TransBus, incorporating the Dennis, Plaxton and WalterAlexander brands, together with ownership
of the parts pressing business of Mayflower Vehicle Systems, and wind turbine maker Mayflower Energy. The group's US and German offshoots continue trading normally. Mayflower shares, which had
been consistently hovering around the 25p level until mid-February, were valued at 6.75p when dealing was suspended on 1 April. In a statement from managing director Chris Wright, MercedesBenz UK Defence pledged its
support for MVS, and is confident of its long-term future. He points out that if M-B wins the contract it will help to secure 700 jobs at MVS. However, the rights to the design and tooling of the S2000 cab remain with DaimlerChrysler.