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Wed, Jul 20, 2005 - Page 12 News List

China's SAIC submits offer for Rover's assets

AUTO INDUSTRY The offer to buy the assets of MG Rover and Powertrain included an intention to resume production at a factory in central England

AP , LONDON

Shanghai Automotive Industry Corp (SAIC, 上海汽車工業), which precipitated the collapse of MG Rover Group Ltd earlier this year when it pulled out of merger talks, made a formal offer on Monday to buy the British automaker's assets with a view to resuming car production in this country.

In a statement, China's state-owned SAIC said it had submitted an offer to administrators from accounting firm PricewaterhouseCoopers (PwC) to buy the combined assets of MG Rover Group and its engine-making subsidiary Powertrain Ltd.

Cooperation

It said the offer was being made in collaboration with private investment vehicle Magma Holdings Ltd, headed by former Ford of Europe chief executive Martin Leach and Edward Sabisky, a former General Motors executive.

"SAIC believes that this proposal represents a compelling proposition for the creditors of the two companies," the Chinese firm said.

"The offer envisages a strategic collaboration with Magma Holdings Ltd, which will focus on the development and distribution of new models and a resumption of car production at Longbridge," the site of Rover's factory in central England.

When an earlier deal with SAIC fell through in April, administrators from PwC were forced to close the plant, putting about 6,000 people out of work. PwC said the most likely course was a breakup and sale of the remaining assets.

Rival bids

Meanwhile, corporate troubleshooter David James said on Monday that he had put together a British-backed bid aimed at preventing MG Rover from falling into Chinese hands.

"It is a credible, fully funded bid with a strong management team that has varied and extensive expertise working in the motor industry," said Barrie Wills, a spokesman for the bid, called Project Kimber.

A second Chinese firm, Nanjing Automotive (南京汽車), was also believed to be bidding for Rover.

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