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Last Updated: Monday, 25 July 2005, 10:42 GMT 11:42 UK
Possible legal action over Rover
MG Rover plant at Longbridge in Birmingham
Unions want to see jobs return to the Longbridge plant
The two losing bidders in the three-way tussle to buy MG Rover are not going away quietly even though Nanjing Automotive has purchased the firm.

It secured a deal with administrators PriceWaterhouseCoopers (PwC) on Friday.

But fellow Chinese firm Shanghai Automotive Industry Corporation (SAIC) is unhappy with the "discriminatory" decision and may take legal action.

And UK businessman David James, who put in two bids to buy parts of Rover, may consider tabling another bid.

Our judgement - on the jobs front, cash flow, and the prospects for suppliers and distributors - was that Nanjing offered the best way forward
Tony Lomas, PwC administrator

But administrator Tony Lomas of PwC said the deal with Nanjing, Chinese oldest carmaker, was rock solid.

"Nanjing has paid a non-refundable deposit and there will be a letter-of-credit payment in respect of the rest of the money," he told the BBC. "It is an unconditional contract."

Friday deadline

He said there were a number of characteristics which differentiated the Nanjing bid from its rivals.

"One of them was the price they paid, and also nobody else, including SAIC, was at such an advanced stage in their contract discussions," said Mr Lomas.

NANJING FACTS
Founded in Jiangsu in 1947
China's oldest carmaker
Makes cars, trucks, buses
Has 16,000 employees
Previous Fiat partnership
Hopes to sell 300,000 vehicles by 2006
"Coupled to that we had a deadline set by Nanjing of Friday, by which time we had to take the transaction or it would be withdrawn."

He said administrators had judged that if they did not take up the offer there was no prospect of getting any of the other offers "up to a level that matched Nanjing's".

'Unfair process'

However there could be legal wrangles ahead when Nanjing begins car production, which it plans to do under the MG marque in Europe.

SAIC bought the intellectual property rights to sell the Rover 25 and 75 models in China during a previous attempt to take over the carmaker.

On Monday SAIC said it would consider taking legal action against Nanjing if it found that its Chinese rival had violated its intellectual property rights (IPR) in the deal to buy MG Rover.

The Rover 75 on display
The Rover 75 could be at the centre of a legal tussle

Late on Sunday an SAIC spokesman said it was examining all its options in reaction to the way the MG Rover sale was carried out, including the possibility of legal action.

SAIC believed its bid was superior to Nanjing's.

"The process has not been handled fairly or in the best interests of creditors and employees," a spokesman said.

"Our offer gave a firm guarantee of substantial employment at Longbridge. It was at least equal and probably superior to Nanjing's. We believe the process has been discriminatory and unfair."

Mr Lomas said he was used to dealing with disappointed losers in bidding battles but there had been "an entirely level playing field".

Job numbers

Meanwhile, union leaders are calling for urgent talks with Nanjing over how many UK jobs it will create.

Rover collapsed in April after a mooted tie-up with SAIC fell through, with the loss of more than 5,000 jobs.

Tony Woodley, T&G general secretary, has called on the two Chinese firms to work together in building cars at Rover's Longbridge plant in Birmingham.

MG sports car
Nanjing says it will build MG cars in the UK

Mr Woodley had earlier said the "prize" of resuming mass car production in the West Midlands had been missed because of the sale of the company to Nanjing.

He said SAIC should have been given more time by PwC to complete its bid and a "fantastic opportunity" could have been missed.

But Mr Lomas said all three bidders had talked in "similar terms" about the level of employment.

"Our judgement - on the jobs front, cash flow, and the prospects for suppliers and distributors - was that Nanjing offered the best way forward."

Mr Lomas said Nanjing intended to relocate the engine plant and some car-production plant to China but to "retain some car production plant in the UK".

He added that Nanjing, China's oldest carmaker, also planned to develop an R&D and technical facility in the UK.

Early indications are that Nanjing could eventually create up to 2,000 jobs in the UK.




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