Fire engine supplier's bail-out put in doubt

The owner of London's fire engines, AssetCo, was tackling its own crisis today as its chief executive and biggest shareholder refused to say he would back its fund-raising proposals, and the shares were suspended.

The group, which has a 20-year contract to supply vehicles to the London Fire Brigade, said three big shareholders, Gartmore Investment, JOHambro and Utilico Investments, had rallied to help its funding problems.

They agreed to provide £10million in exchange for shares, as AssetCo asked investors to approve a new placing to raise £16million, partly to pay back creditors including Lloyds Banking Group. But evidence of AssetCo's internal turmoil came as it admitted it "received a claim late last night" from chief executive John Shannon, who owns 30% of the company, "asserting he is not bound by his irrevocable undertaking to vote in favour of the [fundraising]".

AssetCo hit back: "The company has been advised that this claim is without merit. In the event that Shannon seeks to breach his undertaking, the company will take appropriate action."

One condition of investors providing the £10 million is that AssetCo replaces chairman Tim Wightman with Tudor Davies, now chairman of technology firm Zytronic.