MG Rover

Price Waterhouse Cooper Update

MG Rover Group Limited and subsidiary companies (in administration) – update by the joint administrators – 20 May 2005 20/05/2005 13:07

The joint administrators of MG Rover Group Limited asked potential bidders to provide proof of funds for their bids by the end of last week and have spent this week examining these. Interest in the MGTF sports car business has been narrowed down to three potentially viable proposals, which will now be explored in detail to see if one of these can be transacted, and discussions for the sale of the rest of the business and assets are continuing with two credible interested parties.

Tony Lomas, joint administrator and partner PricewaterhouseCoopers said:
“We are still discussing a sale of the rest of the business and assets with two credible interested parties. They are particularly concerned to understand what rights SAIC or other third parties have in physical assets at Longbridge and in the intellectual property rights. We can now provide them with a lot more positive information regarding these points as we have further examined the matter.”

“While there is still an outside possibility that some form of car production could recommence at Longbridge, the cost and complexity of the challenge should not be underestimated. Engine production would be a lesser, but still very demanding, challenge. The potential buyers are known to be looking at the alternative scenarios of continuing production at Longbridge or relocating it elsewhere.”

“While efforts to sell the business continue, we are progressively downsizing the support functions in order to further reduce costs. Around 400 people are still employed at MG Rover, helping us mothball the facilities and support car sales activities in the UK and Europe. A further 110 people are employed at Powertrain undertaking similar roles.”

“We will be posting letters to creditors early next week, notifying them of a meeting on 10 June at which we will report on the companies’ affairs.”

Notes:

1. On Friday 8 April 2005, Ian Powell, Tony Lomas and Rob Hunt were appointed joint administrators of MG Rover Limited, while Tony Lomas, Rob Hunt and Steven Pearson were appointed joint administrators of Powertrain Limited. Steven Pearson and Rob Hunt were appointed joint administrators of MG Sport and Racing Limited on 12 April. Tony Lomas, Rob Hunt and Steven Pearson have also been appointed joint administrators to eight European subsidiaries of MG Rover Group Limited.

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