Posted on 04/07/2005 4:13:04 PM PDT by HAL9000
LONDON (AP) - Cash-strapped car manufacturer MG Rover Group is going into financial administration after a proposed takeover deal with a Chinese firm fell through, the British government said Thursday night."MG Rover has announced that their board has decided to call in the receivers,'' Trade and Industry Secretary Patricia Hewitt said.
Rover said it had asked PriceWaterhouseCoopers to "accept engagement to advise the board of directors on the current position at the company.''
Earlier Thursday, Rover - the last major British-owned carmaker - suspended production at its British factory and called on the government to firm up its offer of a 100 million pound (US$188 million, euro142.42 million) bridging loan to keep the company solvent and assist the proposed deal with Shanghai Automotive Industrial Co. MG Rover executives and British government officials have been in China holding emergency talks with SAIC.
Reports had suggested that the deal, announced in November by MG Rover, was close to collapsing because of Chinese concerns about the British manufacturer's perilous financial situation.
At a news conference late Thursday, Hewitt said the Chinese firm had "made it clear that they were not confident about the future solvency of MG Rover, and therefore there was no reasonable prospect of a deal.''
SAIC said MG Rover had failed to meet the requirement that it "was demonstrated to be solvent at the point of signing a deal and for two years thereafter.''
MG Rover's situation had looked dire all day.
The company said no cars were being built Thursday at its Longbridge plant in Birmingham, central England, because of component supply problems.
Peter Beale, vice chairman of Phoenix Venture Holdings, MG Rover's parent company, said earlier Thursday that speculation about Rover's ability to survive "has affected the confidence of our suppliers and dealers and time is clearly running out.''
Beale had pushed for the government loan to be provided immediately to give MG Rover more time to complete the deal with SAIC.
"The PVH directors will provide 10 million pounds (US$18 million, US$14 million) of personal money to convince the government of our commitment. What we need now is the government to decide,'' he said.
The troubles at MG Rover - an industry stalwart that employs more than 6,000 Britons - come at a sensitive time for the government, with a general election just four weeks away.
Hewitt had said earlier Thursday that the government would grant the loan - provided the two sides came to a deal.
"The government stood ready to issue bridging finance of over 100 million to help, but without a deal there was no possibility of a bridging loan,'' Hewitt told reporters.
"SAIC, for their part, indicating that bridging loan finance would not have solved their concerns.''
She said the administration announcement was "a devastating blow to all those involved - the workers and their families, the company's suppliers and the wider community. Tonight our thoughts are with them.''
Hewitt said the government would work with unions and Rover's administrators to try and secure future car production at the 100-year-old Longbridge plant.
She said details of a government support package would be released Friday. SAIC's acquisition of MG Rover would have required approval from the Shanghai city government, SAIC's controlling shareholder, and the National Development and Reform Commission, a cabinet-level agency in charge of economic policy.
Sorry to see them going bankrupt, but it's better than selling out to China.
The way you get rich is to go public, and once having gone public sell out. China is buying, so the greater fool theory works sometimes.
They need to go retro. Imagine a TC, TD, TF or even a MGA with modern mechanicals.
MG Rover. Back when they were part of British Leyland, they were known for good designs, lousy workmanship and unreliable components.
Girly men death traps.
Sounds like a good business plan - if they don't use Lucas electrical components.
Lucas electronics, Red China --- either way, you're dealing with the prince of darkness.
"Sounds like a good business plan - if they don't use Lucas electrical components."
Oh boy! Lucas lighting, Smiths gauges, and hang the whole mess together with Whitworth nut and bolts. Take a giant leap into the 1940's.
I owned, a various times, two Triumphs, an Austin Mini, and a Bugeye. I know whereof I speak.
Agreed! I used to replace starter motors religiously on the '86 XJ6!
My favorite British car bumper sticker: "Why do the English drink warm beer? They have Lucas refrigerators."
I had a Triumph Spitfire once: 1 hour working on the car per 1 hour driving.
"Well of course it leaks... it's British!"
Ah, those Lucas electrics .....
How about just modern electricals?
A friend has a 1960 +/- TR3, still goes like a rocket.
"I owned, a various times, two Triumphs, an Austin Mini, and a Bugeye."
I had a Bugeye and a Jag XK-140MC - later had a 64 Sprite that I drove from Charleston,SC, to Fairfield, CA, after buying it from a friend. Oddly enough, the only non-Lucas item on the car was a Delco electric fuel pump which failed just east of Little Rock. It was replaced with a Lucas pump which was still on the car when I sold it. I was probably fortunate and had few oil leaks with the Brit cars - the VW with the cardboard pushrod tubes was another story.
Lucas wasn't called the Prince of Darkness for nothing! Not to mention those stone age SU's. The Brits were very traditional. I had a Morris 1000 and a MG sedan (1100cc and front wheel drive). Wish I still had the Morris.
The three positions of a Lucas switch
Dim, flicker, and off.
I have a 69 Triumph Bonnie motorcycle which I love.
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