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The BBC's Lucy Atherton
"BMW say there are only two alternatives: sale or closure"
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The BBC's Industry Correspondent Stephen Evans
"False rumours abound"
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The BBC's Political Correspondent Nicholas Jones
"Stephen Byers is anxious not to raise expectations"
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Sunday, 30 April, 2000, 16:07 GMT 17:07 UK
Phoenix 'needs government cash'
BMW and Rover logos at Frankfurt motor show 1999
BMW will reveal Rover books on Tuesday, sources say
Pressure is growing on the UK Government to provide the Phoenix consortium with financial aid to save the Rover car group.

Unions have called on the government to step in to help the bidders put together their 1.2bn deal.

But the Department of Trade and Industry said that Phoenix has not asked the government for aid, contrary to a Sunday newspaper report that it is set to receive 100m.

Phoenix has now received a sale and purchase agreement for Rover from BMW, which it says it is examining prior to its meeting on Tuesday.

BMW's optimism

BMW is optimistic it can reach a deal with Phoenix to save Rover, but it remains unclear where Phoenix will get the money it needs.

"We are quite optimistic that there is a fair chance that we can come to a positive solution," a BMW spokesman said on BBC's Radio Five Live.

Phoenix has less than four weeks to put together and finalise a bid, after talks with frontrunners Alchemy collapsed on Friday. It has assured BMW that it can finance the deal.

On Sunday, it received a detailed sales and purchase agreement for Rover from BMW.

"The consortium will now carefully consider this agreement in preparation for its meeting with BMW on Tuesday." it said in a statement.

Intensive telephone talks have begun between the two companies, in which the government is involved, and the Rover books will finally be opened to Phoenix in London on Tuesday.

The database of sales, costs and revenue will give Phoenix the crucial information it needs to finalise its 1.2bn financial backing.

John Towers
John Towers: Race against time to save Rover
BMW will then proceed with what is being described as "serious" negotiations with Phoenix, after an apparent transformation in its attitude to the bid.

BBC Industry Correspondent Stephen Evans said BMW is now believed to have turned its back on Alchemy, whose withdrawal from the talks had been seen as a possible negotiating tactic.

But it is still not clear how Phoenix, led by former Rover chief executive John Towers, can pull the 1.2bn deal together in time to meet the strict four-week deadline which BMW has imposed.

Abbey National has denied reports in a Sunday newspaper that it was to provide 500m backing for the Phoenix bid.

A spokesman said there was "no question of Abbey National supporting the Phoenix bid".

Union pressure

TUC general secretary John Monks called for the government to provide financial support to prevent the closure of Rover.

"The government were prepared to give money to BMW for the development of Longbridge and I think they should be prepared to give money to the Phoenix bid as well," he said.

John Monks: time the government acted

The Phoenix consortium has declined to provide any detail on the financing.

"I can say categorically that the money is in place...everything is in place, you have a team who know exactly what they are doing," John Hemming, the West Midlands businessman who brought the consortium together, told BBC's News 24.

BMW has promised to keep production of the new Mini in Britain, despite media speculation that it would move to Germany.

Earlier it said the Phoenix bid was the only chance for Rover to survive.

"At the moment this path does not only present itself as passable, but is also the only possibility to continue Rover Car Operations in the desired sense - otherwise a closure is unavoidable," said Rover Group chairman Professor Werner Samann.

BMW had previously rejected the bid as unviable.

Alchemy had planned to end mass car production at Longbridge and build MG sports cars instead, at the cost of thousands of jobs.

Phoenix has proposed to cut Rover production by half, but promises that there will be fewer job losses.

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See also:

29 Apr 00 | Business
Phoenix enters Rover spotlight
28 Apr 00 | Business
BMW threat to close Rover
28 Apr 00 | Business
BMW's image damaged
28 Apr 00 | Business
Workers cheer Alchemy move
28 Apr 00 | Business
Can Phoenix turn Rover around?
28 Apr 00 | Business
Byers urged to act over Rover
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