15/04/2005 11:52

As announced on Monday this week, the joint administrators of MG Rover Group Limited and Powertrain Limited secured £6.5m funding from the Government to sustain the business for a further week. The funding was to provide a breathing space to seek to engage in discussions with SAIC.

Ian Powell, joint administrator and partner in PricewaterhouseCoopers said:

“We have received a copy letter from SAIC early this morning which communicates to the DTi that they are 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. As we indicated earlier in the week significant redundancies will now be effected.”

Steps are now being taken to formally notify employees who will be made redundant. The administrators have 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, PricewaterhouseCoopers added:

“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.”

Ian Powell went on to add: “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.“

The joint administrators will hold a press conference this afternoon 15 April scheduled to start at 3pm in the Conference Suite at Q gate, Longbridge. Broadcast crews and journalists are asked to arrive from 2.00pm to set up equipment.

1. On Friday 8 April 2005, Ian Powell, Tony Lomas and Rob Hunt were appointed joint administrators of MG Rover Limited, while Tony Lomas, Rob Hunt and Steven Pearson were appointed joint administrators of Powertrain Limited.

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