On Friday PWC, the administrators for MG Rover announced
that a deal had been struck with Nanjing Automotive of China to buy the assets
of MG Rover Group.
However the Rover 75 could be at the centre of a legal
tussle, according to the BBC due to Property Rights sold to SAIC
towards the end of 2004, although its unclear just what rights were
sold. The
sale to Nanjing comes as a blow for UK businessman
David James, who has put in two bids to buy parts of Rover. Earlier
this week Mr James, the company-recovery specialist who helped revive
the Millennium Dome, told the BBC the combined value of his bid would
be about
£40m.
Car and engine assets
State-owned Nanjing, China's oldest carmaker, and
independent Shanghai Automotive Industries Corp (SAIC) had already put
in bids. Administrators PricewaterhouseCoopers (PWC) have been
looking to sell off
remaining MG Rover group's assets since it collapsed in April.
PWC had earlier confirmed that Nanjing
plans to acquire all of the car and engine production assets of both MG
Rover
and its engine firm Powertrain. Nanjing had
been close to a winning bid last Friday but SAIC then came back with
another
offer, and Mr James put in his offers this week.
Production plans
Nanjing has said it wants to restart car
production in the West Midlands, but may look
to use other sites in the region too. Its job hiring plans are unclear, but the TGWU has expressed fears the Chinese
company may not maintain substantial production in the UK. Nanjing has said it plans to use MG as its main
marque in Europe while developing other MG Rover brands, such as Austin, elsewhere.
It has also said it hopes to shift production of small and medium-sized cars to
China, and then export kits
to the UK
for final assembly.
Legal battle
However the successful Nanjing
bid could start a prolonged legal battle.
SAIC bought the intellectual property rights for the Rover 25 and 75
models
during a previous attempt to take over the carmaker. Nanjing had
previously rejected any claims that SAIC's ownership of the rights to
the Rover
25 and 75 engines would affect its plans. And more recently Honda
has repossessed equipment and blueprints, making it more difficult
for any buyer to restart production of the Rover 45 - based on the
Honda Civic
- or MG ZS models.
Nanjing uncertaincy
In the days after the agreed sale however, the situation has
become cloudy. Within hours of signing the deal, Nanjing has reportedly
approached the other unsuccessful bidders offering to sell them part or all of
the assets it bought, fueling speculation that not only did they not expect to
win, they haven't got the money to complete the deal.
In addition is has come to light that another, more substantial
bid may well have been ignored by PWC. Martyn Moseley, the Birmingham based transport tycoon reportedly
offered around £90m in cash, with no conditions for the company but was given
just 36 hours to produce the money. Nanjing
on the other hand appear to have been sold the company with just a credit note
from a bank for their deposit.
MG Rover seems to attract controversy and it shows no signs
of stopping any time soon.
(Credit in part to the BBC for parts of their reporting used in this article)