Honda and Acura Car Forums banner
1 - 4 of 4 Posts

·
Registered
Joined
·
5,405 Posts
Discussion Starter · #1 ·
MG Rover starts bankruptcy procedures after China deal fails

Business - AFP

LONDON (AFP) - Britain's MG Rover has begun bankruptcy procedures after China's Shanghai Automotive Industrial Corporation (SAIC) pulled out of a proposed tie-up, Britain's trade secretary said.

The announcement of the collapse of the deal signals the end of Britain's last independent automaker and the likely loss of thousands of jobs, and comes a day after the government announced a general election in a month's time.

"Tonight MG Rover has announced that their board has decided to call in the receivers," Trade and Industry Secretary Patricia Hewitt said in a terse statement at a press conference.

"Everyone recognized that a partnership with SAIC was critical to MGR's future," Hewitt said.

"In the end, SAIC 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."

A source at the Chinese firm also said that sufficient British state funding for Rover had not been forthcoming so "there could be no deal".

Rover's entry into receivership means that outside financial administrators will take control of the company and assess its assets and debts in advance of possible liquidation.

Earlier on Thursday Rover halted production at its main car factory site in Longbridge, in the central English city Birmingham, where some 6,100 workers are employed.

The plant is surrounded by key marginal constituencies which will be fought over in the following weeks by Prime Minister Tony Blair's Labour Party and opposition rivals.

In a bid to avoid the job losses and save the deal, the government had stressed that its bridge loan of 100 million pounds (146 million euros, 188 million dollars) was still on the table.

But Hewitt said the Chinese company ultimately found the offer insufficient.

"The government stood ready to issue bridging finance of over 100 million pounds to help, but without a deal there was no possibility of a bridging loan, SAIC, for their part, indicating that bridging loan finance would not have solved their concerns."

A spokesman for SAIC, quoted by Britain's Press Association newswire, said the company always made it clear that MG Rover would have to be solvent for at least two years for the partnership deal to go ahead.

He said that the British government had offered to provide interim grant aid, but added: "Such grant aid has not been forthcoming. SAIC can do nothing. There can be no deal."

MG Rover, which produced its first car in 1904, was bought by BMW in 1994, but the German carmaker pulled out in 2000, and was saved from closure by a group of local businessmen, including its then-chief executive John Towers.

Tony Woodley, leader of the Transport and General Workers Union, said some blame for Rover's "deathknell" went to German carmaker BMW for walking away from the company.
They produced their first car in 1904, pretty long history. I don't care much for them, but it sucks to see them go out of business either way.
 

·
Registered
Joined
·
253 Posts
As a Honda fan, it's sad to see it happen.
 

·
Registered
Joined
·
5,160 Posts
hm.. nobody want to buy dat car company? who doesnt. if they can prove themselve that they could make money then some ppl would try to save that company. i remember BMW bought i long time ago. got into debt because MG got alot of debt BMW sold the MG very cheap just try to get away from all the problems.
 
1 - 4 of 4 Posts
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top