London black cab maker Manganese Bronze said its Chinese joint venture partner had pulled out of financing plans that would have seen it take a controlling stake in the group.
Shares in Coventry-based Manganese plunged 11 per cent after the group announced China’s Geely had decided against the deal.
Geely - which already owns 23 per cent of Manganese - had been in lengthy talks over a share placing to provide Manganese with financing in return for a 51 per cent stake.
The move would have given Manganese cash to expand, although the firm stressed today its international growth plans would remain on track.
It added the Chinese joint venture, the Shanghai LTI Automobile Components Company (SLTI), would not be affected.
John Russell, chief executive of Manganese Bronze, said: “We look forward to our continuing co-operation with Geely.
“The decision not to proceed with the placing should not affect the future of our joint venture or international expansion plans.”