UK: MG Rover administrator rejects bid from Russian TVR owner

By just-auto.com editorial team | 4 July 2005

MG Rover's administrator, PricewaterhouseCoopers, has rejected an attempt by Russian millionaire Nikolai Smolenski to buy the Longbridge-based business, according to a report in the British Sunday newspaper, the Observer.

The paper said PWC last week wrote to Smolenski, dubbed the 'baby oligarch', to tell him that his offer would not be in the best interests of MG Rover creditors, who are owed more than £1.4 billion.

Sources close to Smolenski, who is the son of a Russian banking tycoon and last year bought the TVR sports car business, told the Observer that he was 'surprised and disappointed' by the decision.

They reportedly added that he had met conditions on bidding laid down by PWC, including providing a 10% deposit - an unusual request from an administrator, and one that is thought to have been made to single out those with serious intentions.

The Observer said Smolenski planned to revive production at Longbridge and to re-employ thousands of the 6,000 employees who have been made redundant since the collapse of the company in April.

The paper said plans to restart Longbridge production have been viewed as a long shot - it would take years for a new investor to repay creditors, reactivate the plant and make a profit. However, the report added, it was thought that, as bidders might lose interest, PWC would keep as many as it could in talks for as long as possible.

The Observer said it was unclear whether PWC has written to either of the two other groups planning bids for the entire business - an Iranian consortium and a group fronted by a former motor industry academic Krish Bhaskar.

PWC reportedly declined to comment on the letter or ongoing negotiations.

Brits bid £40m for MG