Chinese state owned carmaker Nanjing Automobile last night clinched the #50 million deal to buy the assets of MG Rover - in a deal which could eventually create up to 2,000 jobs at Longbridge.
Nanjing overcame stiff competition from rival bidders Shanghai Automotive Industry Corporation (SAIC) and Project Kimber.
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The firm confirmed that it would be putting Longbridge at the centre of its operations, which would help it fulfil its ambition to become a player in the global automotive industry.
It said that with its partners, Arup and China Ventures, it would begin work to build a ?vi-able automotive business in China and the UK?.
It plans establishing a low cost global supply chain and ?consol-idating the Longbridge site? as a platform for its business.
Up to 2,000 jobs could be created at the site, which could be involved with five new models, including a revived MG Midget.
?The acquisition of MG Rover gives Nanjing the opportunity to establish a presence in Europe, creating high value MG cars in the UK, completed by volume production of a range of vehicles in China,? the statement said.
John Miles, chairman of Arup?s consulting division, said: ?This is great news. It brings together Britain?s recognised expertise in premium products with China?s emerging strength in volume production.
?The fact that Nanjing has bought the entirety of MG is an indication of their bigger intention to become a global automotive company.
?Arup will be working closely with Nanjing to help them develop their strategy to achieve this goal.
?It is premature to release detailed plans at the moment. It is clear from our bid, and the indications from other bidders, that a viable MG business is possible in the UK.?
Rob Hunt, joint administrator and partner at PWC, said the sale to Nanjing had been made because it represented the most certainty.
He added that it had prevented a fire sale of the business and raised the most money for creditors who are owed #1.4 billion following the collapse of the carmaker in April
He said: ?We were talking to three parties, who all had plans for some form of production, some form of manufacturing and design work.
?Nanjing came in with the most certainty and the best offer for the creditors. All the other offers had many conditions which had to be resolved, while the conditions with Nanjing have been resolved.?
Mr Hunt added: ?In early June I reported there were no viable bidders for the business as a going concern.
?As a result, plans had been put in place for a break-up sale, unless a bidder pre-empted that process before it could be completed.
?SAIC had offered to buy the engine plant for relocation to China, so negotiations were underway to sell those assets separately.?
While negotiations were underway with Nanjing, PWC became aware of interest from Martin Leach, a former Ford Europe chief executive, in the car production assets.
But no bid has ever been made by Mr Leach, said Mr Hunt.
He said: ?Until late last week SAIC had offered to acquire only the Powertrain assets. On Monday of this week SAIC submitted a conditional bid for all of the MG Rover and Powertrain assets. However the level and conditionality of SAIC?s bid left Nanjing?s bid as the preferred way forward.?
Mr Hunt said a residual workforce of around 300 people would remain at MG Rover and Powertrain to assist the administrators and facilitate the handover.
In the meantime Nanjing intends to begin to hire staff to assist it in implementing and developing its strategy, with work expected to start early next week. Eversheds provided legal advice to PWC throughout the negotiations.
Phoenix Venture Holdings directors welcomed the announcement, particularly as Nick Stephenson, one of the consortium that took over Rover from BMW in 2000, has been working closely with Nanjing in an unpaid advisory role.
Sue Battle, chief executive of the Birmingham Chamber of Commerce, said: ?If there is a possibility of a deal on the table that is going to retain some assets in the Midlands, that is very important.
?But there is a large amount of due diligence to be done by the buyers.
?I do not know to what extent
news.? these are going to be lift and shift operations, but there must be jobs for Longbridge and the supply chain in the region.
?Everyone feels there is a significant amount of value in the MG brand.
?Anybody who can offer a wide variety of jobs at Longbridge, jobs with a future, that has to be good news."
But problems still remain, with an investment of #500 million needed to restart production at Longbridge.
The scale of the problems became apparent last night as a director of one major component supplier said that his company would not be willing to resume supplying parts to MG Rover or any of its successors.
Brian Francis, managing director of Thyssen Krupp, said: ?If we are not careful three, four or five years down the line we will be talking about another administration job.?