By Chris Morley, Evening Mail
MG ROVER’S attempts to break into the glamour world of racing succeeded in selling fewer than ten cars – and clocked up £48 million debts.
The Phoenix Four’s bid to create a “halo effect” to boost the image of the group proved a hugely expensive flop, selling cars at £80,000 – when they would have needed double that to come in at a profit because of the hi-tech materials used.
The full disaster of Longbridge-based MG Rover Sport and Racing venture was exposed to creditors at a meeting at Birmingham’s Hilton Metropole yesterday.
Out of the £48.2 million owed when the subsidiary crashed into administration in April, £41.2 million was owed to the parent company, mainly in pension payments.
Virtually nothing has been left with which to pay the 200-plus companies saddled with unpaid bills.
Joint administrator Steven Pearson told the Evening Mail: “The reality is when you divide anything by £50 million, you don’t get very much.
“We hope to preserve a few jobs and do a sale of the business, but I would not expect there to be anything except a few pence in the pound for creditors.”
Sixty interested parties had inquired about the business but only three serious contenders were left in discussions, he revealed. A sale would go through in a month when checks had been carried out on finances.
Mr Pearson said the operation had been set up by MG Rover to ape bigger car makers who had loss-making supercars in their range.
But the Birmingham attempt had been beset with problems and Mr Pearson said that sales “were politely described as disappointing”.
Finally launched for sale in September, the powerful V8 Mustang-engined MG SV sports car was not a hit in a highly competitive market. Fewer than ten were bought as the firm fought in a market range containing the likes of prestige Aston Martin.
Mr Pearson said the image was also dented by revelations from Mr Bean funnyman Rowan Atkinson that the car continually broke down as he test-drove it for a motoring magazine. The car’s body was made from highly advanced carbon fibre which could have cost up to £30,000 alone. “Arguably, the car should have been sold at £150,000 not £80,000,” added Mr Pearson.
The antics of the racing division were criticised this week by design guru Peter Stevens, who criticised John Towers and his directors for running the group like a “corner shop”. He claimed money was lavished in attending glitzy racing meetings such as Le Mans.