Shanghai Automotive has pulled out of acquiring MG Rover, sealing the doomed car manufacturer’s fate and creating ‘significant’ redundancies with immediate effect, according to administrators PricewaterhouseCoopers.
Ian Powell, joint administrator and partner at PwC, received a copy of a letter from SAIC to the DTI early this morning, which informed him that SAIC was ‘not willing to acquire either the whole or part of the business on a going-concern basis’.
‘In light of this important development, we have concluded that there is no realistic prospect of obtaining sufficient further finance to retain the workforce while the position with other parties is explored,’ said Powell. ‘As we indicated earlier in the week, significant redundancies will now be effected.’
PwC said that steps were being taken to ‘formally notify employees who will be made redundant’. PwC added that it had established an employee helpline, and made arrangements with the Redundancy Payments Office in Birmingham to handle employee redundancy claims.
Tony Lomas, joint administrator and partner at PwC, said: ‘We have worked closely with the unions, government, employees and directors to understand the position and the options for the business.
‘It was apparent that very significant funding would be required to sustain the business as a going concern and that a sale of the complete business would be extremely complex and would take a long time to conclude. In addition to exploring the interests of SAIC, we have received a number of other enquiries. In our view, none of these is capable of resulting in a sale of the complete business.
‘During the course of this week we have made every effort to establish SAIC’s intentions. We have had regular contact with SAIC’s advisers and had established direct contact with the company. SAIC has now stated its intentions and unfortunately does not wish to acquire the business.’
Powell added: ‘We are extremely disappointed that SAIC has decided not to progress discussions to acquire the business. We are very conscious of the impact this news will have on the employees, their families and the businesses dependent on MG Rover Group.’
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