Wednesday, July 27, 2005
LexisNexis(TM) Academic - Document
LexisNexis(TM) Academic - Document
Copyright 2005 The Financial Times Limited
Financial Times (London, England)
July 23, 2005 Saturday
London Edition 3
SECTION: FRONT PAGE - COMPANIES & MARKETS; Pg. 1
LENGTH: 446 words
HEADLINE: Nanjing wins Rover for Pounds 50m
BYLINE: By JAMES MACKINTOSH
BODY:
* Deal will create fewer jobs than rival bids
* Creditors to get 3 1/2p in the pound at most
* Rival Chinese bidders set for court
Nanjing Automobile, China's oldest vehicle manufacturer, last night bought MG Rover, the failed Birmingham carmaker, for a little more than Pounds 50m.
The deal will frustrate rival bidder Shanghai Automotive Industry Corp, China's biggest carmaker, and set the stage for a legal battle between the two state-owned manufacturers.
The outcome is likely to prove controversial as Nanjing plans to create fewer British jobs than either SAIC's bid or that of David James, the corporate troubleshooter backed by property entrepreneur Robert Tchenguiz. But Tony Lomas, administrator, said Nanjing's bid was "materially higher" than others.
Nanjing was also indirectly responsible for Rover's collapse. The company failed after a joint attempt by Nanjing and SAIC to buy control this year was withdrawn because of Rover's financial weakness.
Nanjing is planning to ship much of the Rover equipment from Birmingham to a plant in eastern China. It also wants to start production in the West Midlands - probably at Rover's Longbridge plant - of the MG TF sports car and the MG ZT saloon.
"The acquisition of Rover gives Nanjing the opportunity to establish a presence in Europe, creating high value MG cars in the UK, complemented by volume production of a range of vehicles in China," Nanjing said.
Up to 2,000 jobs would be created, according to people familiar with the plans, although finance needs to be found for the UK operation. Unions representing former Rover workers had strongly backed the SAIC bid, and Tony Woodley, general-secretary of the Transport and General Workers Union said it was "disappointing that the administrators have not seen fit to allow SAIC to complete its bidding process". He is seeking urgent talks with Nanjing about its plans.
Arup, the engineering consultancy, and China Ventures, a consultancy run by fixer Qu Li, advised Nanjing and may take stakes in the British arm of the company.
The purchase price means Rover creditors, owed more than Pounds 1.4bn, will get a maximum of just 3 1/2 pence in the pound, and probably far less after fees for PwC, the administrator, have been deducted.
SAIC and Nanjing could end up in court, as SAIC believes it owns the designs to Rover's small and large cars and the engines, for which it paid Pounds 67m last year before the collapse.
SAIC said it was "reserving our options, including legal options". It added: "We are concerned that the decision wasn't properly thought through. Our bid was a much better offer in terms of employment in the UK." Analysis, Page 6 Newsfile, www.ft.com/rover
LOAD-DATE: July 22, 2005
Copyright 2005 The Financial Times Limited
Financial Times (London, England)
July 23, 2005 Saturday
London Edition 3
SECTION: FRONT PAGE - COMPANIES & MARKETS; Pg. 1
LENGTH: 446 words
HEADLINE: Nanjing wins Rover for Pounds 50m
BYLINE: By JAMES MACKINTOSH
BODY:
* Deal will create fewer jobs than rival bids
* Creditors to get 3 1/2p in the pound at most
* Rival Chinese bidders set for court
Nanjing Automobile, China's oldest vehicle manufacturer, last night bought MG Rover, the failed Birmingham carmaker, for a little more than Pounds 50m.
The deal will frustrate rival bidder Shanghai Automotive Industry Corp, China's biggest carmaker, and set the stage for a legal battle between the two state-owned manufacturers.
The outcome is likely to prove controversial as Nanjing plans to create fewer British jobs than either SAIC's bid or that of David James, the corporate troubleshooter backed by property entrepreneur Robert Tchenguiz. But Tony Lomas, administrator, said Nanjing's bid was "materially higher" than others.
Nanjing was also indirectly responsible for Rover's collapse. The company failed after a joint attempt by Nanjing and SAIC to buy control this year was withdrawn because of Rover's financial weakness.
Nanjing is planning to ship much of the Rover equipment from Birmingham to a plant in eastern China. It also wants to start production in the West Midlands - probably at Rover's Longbridge plant - of the MG TF sports car and the MG ZT saloon.
"The acquisition of Rover gives Nanjing the opportunity to establish a presence in Europe, creating high value MG cars in the UK, complemented by volume production of a range of vehicles in China," Nanjing said.
Up to 2,000 jobs would be created, according to people familiar with the plans, although finance needs to be found for the UK operation. Unions representing former Rover workers had strongly backed the SAIC bid, and Tony Woodley, general-secretary of the Transport and General Workers Union said it was "disappointing that the administrators have not seen fit to allow SAIC to complete its bidding process". He is seeking urgent talks with Nanjing about its plans.
Arup, the engineering consultancy, and China Ventures, a consultancy run by fixer Qu Li, advised Nanjing and may take stakes in the British arm of the company.
The purchase price means Rover creditors, owed more than Pounds 1.4bn, will get a maximum of just 3 1/2 pence in the pound, and probably far less after fees for PwC, the administrator, have been deducted.
SAIC and Nanjing could end up in court, as SAIC believes it owns the designs to Rover's small and large cars and the engines, for which it paid Pounds 67m last year before the collapse.
SAIC said it was "reserving our options, including legal options". It added: "We are concerned that the decision wasn't properly thought through. Our bid was a much better offer in terms of employment in the UK." Analysis, Page 6 Newsfile, www.ft.com/rover
LOAD-DATE: July 22, 2005
# posted by Eastlaw @ 12:53 AM 
