[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Friday, 27 May, 2005, 05:48 GMT 06:48 UK
Rover creditors may get just 1%
Rover workers leaving Longbridge
More than 5,000 jobs have been lost at Rover
Creditors of MG Rover, the troubled British car firm, could get no more than 5p in the pound, and perhaps as little as 1p, according to estimates.

Administrator PricewaterhouseCoopers has sent documents to creditors showing that it has received claims for more than 1.37bn ($2.5bn).

The administrator could have assets of only 80.5m after preferred creditors and secured bank loans are paid.

The administrator's own costs could also make a "substantial" dent.

The Financial Times estimates that "companies owed money by MG Rover are likely to be paid a maximum of 5p in the pound", while Reuters quotes a source close to the situation who says they may struggle to get 1%.

Jon Bunn, a spokesman for PwC confirmed it had produced a report for creditors, but said it did not include calculations on what they would receive.

"Until we know how much money we're going to get from selling Rover assets, it is impossible to say how much creditors will get in the pound," said Jon Bunn, a spokesman for PricewaterhouseCoopers.

He added that PwC would hold a meeting for creditors on 10 June in Birmingham.

Unanswered questions

The report for creditors covers only MG Rover, not its sister company Powertrain.

It shows that Rover was losing 25m a month before it went into administration in April and that its former owner Phoenix Venture Holdings is its largest creditor.

On Thursday, the Financial Reporting Council, a corporate reporting and governance watchdog, said its investigation of Rover's published accounts to the end of 2003 had raised a "number of questions".

MG Rover's creditors include the network of dealers, former owner Phoenix Venture Holdings, the VAT man, pension funds and BMW.

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