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Rover/Phoenix subsidiaries fall like dominoes

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21st Apr 2005
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This week has seen the corporate infrastructure of MG Rover crumble as hopes fade of any meaningful rescue by the Shanghai Automotive Industry Corporation.

On Monday 18 April, PricewaterhouseCoopers announced three of its partners had been appointed joint administrative receivers at Phoenix Venture Motors (PVM). PVM operates 11 MG Rover dealerships in the Midlands, North West and South of England and reported a loss of £2.5m on turnover of £80m in the year to 31 December.

On Monday afternoon, PwC's team closed dealerships in Northampton, Oxford and north London with 86 job losses out of the company's total of 472 employees.

PwC partner and joint administrator Rob Hunt explained: "Following the administration of MG Rover Group Limited, which owed PVM a substantial sum of money, and our announcement on Friday that the chances of securing a sale of MG Rover Group Limited as a going concern look less likely, the directors of PVM were left with little option but to seek an administration order. We will be working with management to quickly establish which of the sites can remain open and continue to trade so as to preserve parts of the distribution channel for MG Rover cars."

On Wednesday 20 April, PwC's Tony Lomas, Steven Pearson and Rob Hunt added eight European sales subsidiaries of MG Rover Group to the portfolio of companies under their control.

With a stock of unsold European specification vehicles on their hands, the administrators said they would contrinue to run the companies, which coordinate MG Rover's sales, marketing and logistics in Germany, Benelux, Spain, Portugal, Italy, France and Ireland.

A PwC spokeswoman said the administrators "were extremely busy and had their heads down", so were unable to expand on the information published in official statements.

However the Daily Telegraph reported that PwC had issued a prospectus to 40 potential buyers with brief unaudited accounts for 2004.

Alchemy Partners' Jon Moulton was one of the people who received a copy and reportedly said, "It took me two minutes to read it."

Five years ago Alchemy had proposed to take MG Rover over from BMW to operate it as a specialist sports car manufacturer. The administrators said they could deliver the MG brand, Moulton noted, but beyond that, "There just is hardly anything there."

MG Rover: The story so far

  • Rover group appoints PwC as administrators 8 Apr 2005
  • Hopes fade for Rover as SAIC says no to talks 12 Apr
  • Rover workers petition PM; MGSR up for grabs 13 Apr
  • Thousands of jobs to go at MG Rover 15 Apr
  • MG Rover accounts: FRC chief calls for new watchdog18 Apr
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