PwC said the failure to pin down a deal with SAIC meant the administrator could not ask for an extension of a ?6.5 million (US$12.2 million) emergency loan from the government to pay workers.
Lomas said that PwC would "mothball" the Longbridge plant, keeping on just 600 workers to complete production on about 1,000 cars. About 400 staff will be retained at the company's Powertrain engine plant and 25 at MG Sport and Racing.
"The auctioneer is not coming in and selling it all off next week, we will be mothballing this facility so that we do have time to go back to SAIC and ask them to tell us if they do have any interest and precisely what that interest is, recognizing that they have of course acquired some of the intellectual property," Lomas said.
Some intellectual property rights for Rover models were sold to SAIC in a ?67 million deal last year, but the Chinese company does not hold the rights to produce the cars in Asia.
German car maker BMW AG has the rights to the Rover name, retaining them when it sold the company to Phoenix Venture Holdings for a token ?10 in 2000. BMW gave MG Rover permission to use the name indefinitely for free under a licensing agreement and said this week it would consider letting another company use the name in the event of Rover's collapse. BMW sold the rights to the MG name to Phoenix in the same deal.
The directors of Phoenix have been criticized for paying themselves significant salaries and pensions as the company was falling into the red. The so-called "Phoenix Four" earlier this week offered assets of up to ?30 million (US$56.8 million) to assist Rover as it tried to resuscitate talks with SAIC, but acknowledged that the assets on offer were subject to attack from creditors.
RSS