Two rival Iranian companies were competing for the remnants for MG Rover over the weekend as administrators considered offers from Russia, China, India and the Middle East, the Daily Telegraph reported on Monday.
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The paper’s report followed a weekend of conflicting reports as Iranian car companies were said to be interested – or not – and the Iranian embassy weighed in with statements.
According to Monday’s Telegraph, the Baluchi company Dastaan said it would produce a £17.5 million letter of credit from Germany’s BW bank today as the down payment on its offer, proposing a deal that could eventually lead to the manufacture of 150,000 Rover vehicles a year in eastern Iran.
The group reportedly said it had “several hundred million dollars” in backing from the Iranian ministry of industry and mines, insisting that the scheme could ultimately be worth £750 million a year for Longbridge. Dastaan claims sole rights over MG Rover products in Iran after signing a contract with Longbridge last December, the Daily Telegraph said.
However, the paper added, a separate group, Saipa, part-owned by the Iranian state, was at the same time exploring options for buying some of MG Rover’s assets though he company, which already manufactures Renault 5s in Iran, reportedly said it was not negotiating to buy MG Rover as such. However, it said the Iranian authorities were eyeing parts of Rover’s “production line and know-how”, the Telegraph added.
The Daily Telegraph noted that the Iranian embassy issued a statement over the weekend that it was halting earlier plans to assemble imported kits following the MG Rover crisis, switching the focus to a search for Rover assets that could “strengthen Iran’s auto industry”.
Motor industry sources told the newspaper that other interested parties included India’s Tata group, as well as firms in Dubai, Turkey and Pakistan.
Dastaan’s consultant in Britain, Peter Linghorn, told the Daily Telegraph that the firm wanted to press ahead with an earlier deal to purchase 2,000 Rover 75 and 45 cars worth up to £20 million, rising to 20,000 cars worth £200 million in coming months. Eventually, the paper added, 150,000 vehicle kits would be assembled each year at a site in Baluchistan.
Linghorn told the Telegraph the deal was almost complete before Easter but final approval was delayed by red tape in Iran. “All it needs is a decision from the administrators and we can restart the programme,” Linghorn told the paper, which added that the administrators are sceptical about the offer, which would require them to re-open the production lines to manufacture specified left-hand drive models with air conditioning.
The Daily Telegraph noted that the administrators’ mandate is to ensure that MG Rover continues to “trade profitably” if possible, and that they have little leeway for committing new investment.
