Manganese Bronze Holdings Plc today announced that it had signed Heads of Terms with Zhejiang Geely Holding Group CO. Ltd, the Chinese car manufacturer.

The two will be establishing a joint venture company to produce the famous London black cab for use in Shanghai.

The Heads of Terms are not legally binding, and are preliminary steps towards definitive and legally binding agreements within the next few weeks.

According to a statement, the total investment of the joint venture is forecast at £53m, £19.85m of which is Manganese Bronze's share.

Assembly and sales of the vehicles will be the responsibility of Shanghai Maple, which is a subsidiary of Geely, who will have the right to sell the vehicles in Asia. Manganese Bronze will have the right to sell the vehicles in the rest of the world.

It is intended that the joint venture produce 20,000 vehicles, which will begin in mid 2008 subject to timely completion of legal agreements and shareholder approval.

In a statement Tim Melville Ross, Chairman of Manganese Bronze said: "We are delighted to have signed these Heads of Terms with Geely. Geely is one of the fastest growing car companies in China, with impressive manufacturing, supply chain, engine and dealership facilities. The joint venture will increase the appeal of our iconic vehicle around the world. We look forward to concluding a final agreement in the near future.'

Whilst Li Shufu, Chairman of Geely, said: "We are very pleased to have signed these Heads of Terms with Manganese Bronze. The London black taxi is an iconic vehicle and we believe that the joint venture can create significant value for shareholders of both sides. We look forward to a significant export opportunity with Manganese Bronze. This is an important agreement for Geely and we are confident that the joint venture will be a success.'

London China