BusinessBusiness RecoveryPwC paid £6.6m from MG Rover collapse

PwC paid £6.6m from MG Rover collapse

Administrators of collapsed MG Rover paid £6.6m - taking total work for five accounting firms to more than £8m

PricewaterhouseCoopers has earned £6.6m as administrators of collapsed car
maker MG Rover and engine manufacturer Powertrain in the six months to 7
October, a creditor’s report has revealed.

This takes the total figure earned by the five firms engaged to advise the
former Longbridge plant and its main supplier to a staggering £8m.

The sale of the car manufacturer assets and its engine-making sister company
Powertrain raised a total of £53m when they were sold to Nanjing Automobile in
July – more than double the original estimates.

However, Powertrain actually sold for more than MG Rover. The former car
maker was sold for for £23m, compared with the estimated £17.8m, while
Powertrain’s value far exceeded its directors’ expectations of £5.7m and
was sold for £30m.

The report revealed that PwC had been paid £5.616m from its work on MG Rover
since it went into administration on 10 June and £1.028m from Powertrain.

‘Our fees are approved and agreed by the creditors committee and it was an
extremely large and complex administration which has involved a great deal of
work’, a PwC spokeswoman said.

The next report to creditors is set to be at the conclusion of the
administration, or in approximately six months, the report added.

Last week Accountancy Age revealed under the Freedom of Information
Act that the five firms – including PwC – engaged to advise on aspects of MG
Rover’s collapse and sale had already earned at least £5m.

Each of the Big Four were involved in advising various parties, and mid-tier
firm BDO Stoy Hayward worked for the DTI as the official investigator.

The DTI said that Gervase MacGregor, the BDO partner working as the
investigator and his firm had earned £1,090,890 in fees, disbursements and VAT
between the 31 May and 31 August – more than £10,000 a day.

The DTI also disclosed KPMG’s fees in relation to the carmaker. The firm was
paid £340,325 for its work.

PricewaterhouseCoopers said in June that it had earned £4m as administrators
for Rover.

Ernst & Young advised Shanghai Automotive, and has not disclosed how much
it was paid for the work.

Deloitte, MG Rover’s former auditors, is facing investigation by disciplinary
body the AIDB over its audit work on Rover. It earned an annual audit fee of
about £300,000.

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