MG Rover’s administrators will continue with plans to sell the assets of the car maker that collapsed with debts of £1.4 billion and more than 5,000 jobs losses.
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Speaking after a meeting with creditors in Birmingham, PricewaterhouseCoopers (PwC) executives told the BBC that Rover would be sold on a “piecemeal” basis.
Rover’s creditors were set to get a settlement that was “nil or negligible” as very few assets remained, PwC reportedly said.
That was in contrast to earlier reports that they might get up to 5p in the pound.
However talks would continue with firms interested in buying Rover as a whole, the BBC noted.
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By GlobalData“We’ve instructed our agents to begin to prepare for the sale of the assets of the company on a piecemeal basis,” Tony Lomas of PwC told the broadcaster.
Lomas reportedly added that there were still some “credible, plausible, interested parties” who said they wanted to buy Rover – more than 630 firms have registered an interest in buying either part or all of Rover.
Only nine of those cleared what Lomas called the “funding hurdle”, with three expressing an interest in the business as a whole.
Few observers see MG Rover being resurrected as a volume car maker. It’s more likely the engine-making operation Powertrain and the iconic MG sports car brand will be sold off to the highest bidder.
PwC told the BBC that it is in talks with Shanghai Automotive Industry Corporation about supplying the firm with Powertrain engines and is planning to send a team to China to assess the feasibility of the deal.
A decision on the future of the Powertrain division, which employs 100 people, “should be resolved over the coming months”, Steven Pearson of PwC said.
“It’s a complex negotiation… but it could potentially result in production recommencing on a limited scale,” he told the BBC.
PwC told creditors they should not expect to get paid much.
“There are very substantial claims…and I have no doubt that those claims will rise in due course,” PwC’s Lomas told the BBC, adding: “So whatever money there is available at the end of the day, it’ll have to be spread among an awful lot of competing claims.”
PwC told the broadcaster that most of Rover’s assets had been sold off to fund the day-to-day running costs of car production but added they found nothing suspicious during their examination of Rover’s accounts.
Separately, the Daily Telegraph noted that PwC itself is eating up a large chunk of what is left for creditors. The paper said the firm has charged £4 million for its first two months, or £100,000 a day, to cover the cost of a 100-strong team, since cut to 50.
The Telegraph said that Lomas allayed concerns that the Phoenix Four, who bought MG Rover for £10 in May 2000 and then made more than £30 million for themselves, could receive £25 milion from the collapse – he said that £442 million of the £500 million owed to companies controlled by the four was ranked behind the money owed to the other creditors.
None of the Phoenix Four – John Towers, Nick Stephenson, John Edwards and Peter Beale – attended the two-hour meeting, the Daily Telegraph added.
