Rover's future to be decided soon

Three bidders remain as TVR's Smolenski is frozen out

By PH Staff / Monday, 18 July 2005 / Loading comments

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Bidding for MG Rover has reached fever pitch, as bidders all seek a role for production of the cars in the UK. Three bidders are currently battling it out for the company's assets together with sister company Powertrain. Administrator PricewaterhouseCoopers (PwC) said all have plans for UK car production, according to a news story on Friday.

Shanghai Automotive Industry Corporation (SAIC), the Chinese company which originally pulled out of buying the company, triggering Rover's collapse in April, has teamed up with Magma Holdings, headed up by Martin Leach, who was formerly boss of Ford Europe. It faces rival Chinese firm Nanjing Automobile.

SAIC's partnership with Magma, which includes former GM boss Edward Sabisky, has changed the situation as the Chinese company was, earlier on in the process, only interested in engine-maker Powertrain. Now Magma is to offer to buy MG Rover as well. "Magma intends to form a new company to recommence production at Longbridge. SAIC will support Magma's development plans", said SAIC.

The third bidder is a group of Birmingham businessmen led by corporate troubleshooter David James.

Meanwhile, TVR owner Nikolai Smolenski's bid was turned down in early July, and was told that his offer "would not be in the best interests of MG Rover creditors", who are owed more than £1.4 billion.

He was said at the time to be "surprised and disappointed", adding that he had met all the conditions on bidding, including providing a 10 per cent deposit aimed at weeding out those without serious intentions. Smolenski's plan was to restart car production at Birmingham's Longbridge plant, re-employing many of Rover's now-redundant 6,000 employees. One report suggested that PwC's response was its resources were limited and would not reply to any further correspondence from Smolenski.

PwC said it was "hopeful of concluding a deal in the near future". Could this be Rover's return?