Page last updated at 13:44 GMT, Monday, 22 February 2010

Red Driving School bought out of administration

Red Driving School promotional image
Red is the third largest driving school in the UK

LVG, the parent company of driving instructor business Red Driving School, has been bought just days after going into administration.

Private equity firm Kelso Place has acquired the business as a going concern and will continue to trade under the Red brand as normal.

The firm told the BBC it had full confidence in LVG's management and had no plans for any redundancies.

It said Red was profitable and had just suffered from cash-flow problems.

Red, established in 1992, is the UK's third-largest driving school.

Franchise business

"Red is a very strong, stable and profitable business, which experienced a short-term funding difficulty when its financing facilities were changed recently," said Philip Weston, a partner at Kelso.

"We have made a significant cash investment in Red in order to solve its funding problem and to ensure that it is able to continue operating successfully in the long term."

LVG employs 400 people in total across three offices, but all the Red Driving School instructors are franchisees.

It also owns two other businesses under the Red brand - Red Instructor Training and Red Fleet Training, which have been taken over by Kelso.

Red Instructor Training trains would-be driving instructors, while Red Fleet Training is employed by companies to test and improve the driving skills of their employees.

LVG went into administration last Thursday.

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Driving school in administration
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