[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Friday, 10 June, 2005, 14:25 GMT 15:25 UK
Rover break-up plan to go ahead
Worker walking past MG Rover plant and protest banner
Rover's demise has hit thousands of households in the Midlands
MG Rover's administrators will push on with plans to sell the assets of the carmaker that collapsed with debts of 1.4bn and more than 5,000 jobs losses.

Speaking after a meeting with creditors in Birmingham, PricewaterhouseCoopers (PwC) executives said 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 said.

However talks would continue with firms interested in buying Rover as a whole.

"We've instructed our agents to begin to prepare for the sale of the assets of the company on a piecemeal basis," said Tony Lomas of PwC.

Mr Lomas added that there were still some "credible, plausible, interested parties" who said they wanted to buy Rover.

Broad interest

More than 630 firms have registered an interest in buying either part or all of Rover.

Only nine of those cleared what Mr Lomas called the "funding hurdle", with three expressing an interest in the business as a whole.

In the run-up to Friday's meeting, Rover had been linked to companies as far afield as China and Iran.

Steering wheel of classic MG car

Analysts are sceptical, however, and warn that the future of Rover as a volume carmaker is unlikely to be salvaged.

What is more probable is that the company's more successful divisions like Powertrain and its valuable brands, such as the sports car marque, will be sold off to the highest bidder.

PwC said 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", said Steven Pearson of PwC.

"It's a complex negotiation... but it could potentially result in production recommencing on a limited scale," he added.

No alarm bells

The future for MG Rover's hundreds of creditors looks a little bleaker, with PwC saying that they should not expect to get paid much.

Reports have speculated that creditors, who are owed about 120m, may get no more than 5 pence in the pound, or even as little as 1p.

"There are very substantial claims...and I have no doubt that those claims will rise in due course," PwC's Mr Lomas said.

"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 said that most of Rover's assets had been sold off to fund the day-to-day running costs of car production.

The meeting on Friday came amid a number of investigations into the reasons behind the collapse of Rover.

There have been a slew of allegations that Rover's owners, the government or even its accountants had kept the public in the dark about its true situation.

PwC told the BBC that they found nothing suspicious during their examination of Rover's accounts.

One Rover dealer tells how the collapse has hit him

The BBC is not responsible for the content of external internet sites


News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia
UK | Business | Entertainment | Science/Nature | Technology | Health
Have Your Say | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
Americas Africa Europe Middle East South Asia Asia Pacific