Barbara McClellan Ward's AutoWorld, Jun 1, 2000 12:00 PM
Thousands of jobs and a symbol of British manufacturing were saved in an
11th hour deal that saw BMW AG selling its Rover car company to a U.K.
consortium. The Phoenix group bought Rover and its MG brand for a symbolic
$16. The sale followed months of uncertainty that had BMW originally
selling the car group to venture capitalists Alchemy Partners, which broke
off negotiations over questions about who would fund redundancy and pension
payments. Phoenix, led by former Rover Chief John Towers, then emerged as
the leading candidate. BMW will lend Phoenix $790 million to restructure
the car group. Additionally, Burdale Financial Ltd., a unit of the
U.S.-based First Union Corp., has offered Phoenix $316 million of working
capital for its bid. Phoenix, meanwhile, is looking for a partner, naming
Honda Motor Co. Ltd. as a possible candidate. The two auto companies had an
alliance before BMW purchased Rover in 1994. Phoenix will develop, build
and distribute Rover and MG vehicles, including the 25, 45 and MG sports
cars, and will soon add 75 production to the plant.
