Tuesday 16th January 2018

Welsh Government owns 3 per cent of TVR

Devolved administration bought a minority stake in 2016 when TVR committed to new factory

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TVR's relationship with the Welsh Government has been simmering rather nicely for a few years now - we reported on the firm locating its production facility in the Ebbw Vale Enterprise Zone all the way back in 2016. But the link up, it would seem, goes slightly deeper than the usual back-scratching, with the administration not only chipping in a £2m loan, but also taking on a 3 per cent stake in the fledgling manufacturer.

That's according to the BBC, which reported today on Welsh Conservative unease about whether or not the public's money had been properly safeguarded. The direct investment in TVR cost the government £500,000 - chicken feed when you consider the broader £100m plan to invest in the automotive business park - but a fairly significant sum when dealing with an as yet unproven commercial enterprise.

A Welsh Government spokesperson told the BBC: "As part of our initial support package to commit TVR to manufacturing in Wales and following independent and specialist due diligence, we provided a repayable commercial loan to the company in early 2016. This was made alongside a private sector lender.

"At the same time Welsh Government also invested £500k into equity on the same terms as other investors. This gives the Welsh Government a minority stake of just below 3 per cent that will ensure the Welsh tax payer benefits from the company's successes."

Broadly speaking, state ownership of car manufacturer shares is not new or even unusual: Lower Saxony famously owns a 12.7 per cent share of the Volkswagen Group and the French government retains almost a 20 per cent of Groupe Renault, to name just two examples. But it is unusual in the UK - and virtually unheard of for the Welsh Government to take such a position.

Speaking to Autocar, TVR chairman Les Edgar, said: "It's an unusual thing for the Welsh Government to invest in a company like this - in fact, I don't think it's ever happened before - so I see it as a sign of their faith in TVR."

There's no arguing with that, and with the former Techboard building now successfully acquired for the manufacturer to move into - and TVR moving onto the first pilot builds following the launch of the Griffith - the public/private partnership will feel like it's in a good place to deliver on the taxpayer money already spent. As ever, we've got our fingers crossed.

[ducnick]

A very shrewd move as it gives the Welsh government a seat at the top table to ensure the success of the company employing local people, paying local business rates and feeding into the local economy. I would imagine any suggestion by the board in a few yrs time to relocate elsewhere would come under fire from this share holder.