Nanjing wins Rover bid, to acquire company, subsidiary |
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Published
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Sat, 23 Jul 2005 18:35
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LONDON: Nanjing Automobile of China won the bid to own the collapsed British automaker MG Rover Group. The administrators of the company, PricewaterhouseCoopers, announced that Nanjing, the oldest automobile firm in China, will assume ownership of both MG Rover Group and its engine-making subsidiary Powertrain Ltd.
The terms of the sale have not been publicised, though some sources in the know said the deal was for 50 million pounds, while others said it could be between 50 million pounds and 100 million pounds.
Nanjing's competitor in China, the state-owned Shanghai Automotive Industry Corporation, and a consortium floated by British businessman David Jones were in the field bidding for Rover.
PricewaterhouseCoopers announced that the "level and conditionality of Shanghai Automotive Industry's bid left Nanjing's bid as the preferred way forward".
The Chinese automaker will begin implementing its revival plan immediately, including hiring and relocation of the engine plant and some production to China, the administrator's spokesperson said. Nanjing will also set up a development centre in Britain.
A company spokesperson, reacting to the deal, said , "The acquisition of MG Rover gives Nanjing the opportunity to establish a presence in Europe, creating high-value MG cars in the UK.., complemented by volume production of a range of vehicles in China."
"Nanjing is going to build in China cars based on the 25 and 75 platform."
It said it will employ about 2000 British workers and produce at least 80,000 MG saloon and sports cars within 5 years, besides developing a research and development facility.
Rover's employee unions had supported a proposed joint venture deal with Shanghai Automotive Industry hoping to restart of production at the Longbridge plant. The sudden bankruptcy of the company did not permit the deal to go through.
One of the unions, the Transport & General Workers Union, said it was disappointed with Nanjing winning the bid but would work with the company on its plans for U.K. production. "We will now make urgent contact with them in order for those discussions to take place," a union official said.
The British government had put in several millions of pounds by way of loans to Rover as a bankruptcy would have led to an embarrassing situation for the Labour Party's election campaign. However, the bankruptcy indeed happened and the company ended up in debt of over 1.4 billion pounds and loss of over 5000 jobs. The administrator had ended the loans and closed the factory paving way for its sale.
Rover, established a century ago, had at one time 250,000 employees on its rolls and its sedans and MG sports cars were legion.
Nanjing makes Palio and Siena cars for Fiat SpA and the buy-out is expected to give the company a capacity to make a wider range of engines and vehicles. Founded in 1947, the company has 16,000 employees and annual production capacity of about 200,000 vehicles. Its major products are trucks, cars and travel buses. It had teamed up with British engineering consultancy Arup.
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