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China's biggest carmaker said it was highly unlikely to agree to a rescue deal for MG Rover as administrators battled Monday to find a buyer for the U.K. firm, which is losing up to 25 million pounds (US$47 million) a month.
About 6,000 MG Rover workers could be made redundant next week if administrators fail to find new investors to inject more money into Britain's last independent carmaker when emergency government funding runs out, administrators PricewaterhouseCooper (PwC) said.
MG Rover, which once made the iconic Mini and Land Rover models, collapsed Friday after failing to agree a rescue deal with China's Shanghai Automotive Industry Corp. (SAIC).
Accountants PwC said Monday it had received several expressions of interest in MG Rover over the weekend, but none of the parties had offered cash to keep the business going.
PwC also said it had contacted SAIC, but the Chinese firm dashed hopes it could be persuaded to return to the table while the company was in administration, a form of bankruptcy where accountants are bought in to try to save the business.
"We still believe it is highly unlikely that SAIC would want to be involved with MG Rover while it is under administration," an SAIC spokesman said.
The banking team SAIC had hired for a possible MG Rover deal has been disbanded, a source close to SAIC said.
"The bankers went home (from Shanghai) last Thursday and have not been reconstituted and there are no current plans to do so."
But SAIC could still be interested in MG Rover assets if the company went into liquidation, the source said. SAIC owned the blueprints to some Rover cars, called intellectual property rights (IPR), which meant they might bid for factory machinery to ship back to China to make the cars there, he said.
PwC said there were no plans to resume car production despite a 6.5 million pound government loan to cover wages and expenses for a week, preventing the immediate layoff of 6,000 workers, who were sent home on full pay Monday.
The European Commission said it expected the British Government to notify it about the emergency funding within the next 24 hours, adding that in theory no aid can be paid out without notification.
MG Rover has struggled to break even after being sold four years ago by Germany's BMW AG as tough competition from Japanese and European rivals hit sales.
Administrators said the firm had "very significant losses" of 20 to 25 million pounds a month.
(Shenzhen Daily April 13, 2005)
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