Final arrangements have still to be completed for the consortium which last Tuesday signed contracts with BMW to buy the ailing Midlands car company, according to Deloittes, which as an advisor to Phoenix on the deal, was also heavily involved in sourcing finance.
Full details of the financial arrangements with BMW are still to be made public though it is understood that it includes a substantial loan from the German company itself. Phoenix bought Rover for nominal sum of just £10.
A major problem for Phoenix was nailing down financing deal to BMW’s satisfaction. It was only an eleventh hour £200m loan from First Union Bank in the USA that finally brought the Munich based car giant to the table.
This week a senior member of the Deloittes team told Accountancy Age about the pressure under which it worked to clinch the contract.
Richard Edwards, corporate finance partner at Deloittes’ Birmingham office, said: ‘It is very surprising what people are capable of under pressure when the adrenaline is flowing. The clarity of thought in a compressed timetable is remarkable.’
Deloittes was left with nine days to clinch a deal that would, under other circumstances, have taken months to complete.
John Towers, who led the Phoenix bid and now heads Rover, believes finances at the car company looked worse than they are because the publicised figures were drawn up using harsh German accounting standards, which depreciate assets more quickly.
Accountancy Age has been drawing attention to the discrepancy since 1998. The analysis of the 1998 accounts filed at Companies House according to UK standards Rover lost £509m. But BMW’s accounts, using German standards, puts the figure at £670m – a difference of some £160m.
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