Nanjing Auto wins Rover bid
25/7/2005 14:14
Zhu Yanyan/Shanghai Daily news
Nanjing Automobile
Group Corp beat out Shanghai Automotive Industry Corp in the bidding for the
remains of failed British automaker MG Rover Group. "Nanjing will now begin
to take control of the assets and develop its plans for the future," according
to PricewaterhouseCoopers LLP, which served as the financial administrator for
MG Rover and has been looking for a buyer for the company for months. "It has
indicated its intention to relocate the engine plant and some of the car
production plant to China, to retain some car production plant in the UK and to
develop an R&D and technical facility here," PwC said in announcing its
decision on its Website late on Friday. PwC did not reveal the sale price,
but a Nanjing newspaper reported that Nanjing Auto offered some 50 million
British pounds (US$87 million). PwC previously disclosed that Nanjing Auto
offered to buy all MG Rover assets for between 40 million and 50 million
pounds. Calls to Nanjing Auto spokesman Liu Ningsheng for comments were not
answered over the weekend. Nanjing Auto offered to take over MG Rover, UK's
last volume carmaker, with a "clean" bid, according to industry
sources. SAIC, however, submitted a conditional offer. "For instance, some
of Rover's property rights are owned by a third party, and we required the
administrator to make clear the rights already sold to others," said an SAIC
executive who spoke on condition of anonymity. "But Nanjing Auto's bid was a
clean bid as it required nothing from the administrator." SAIC didn't reveal
how much it offered during the bidding. Industry insiders were left wondering
exactly how much Nanjing Auto won in the end, however. The property rights for
Rover 25s and 75s were sold to SAIC during a yearlong negotiation process before
MG Rover's collapse. Equipment and blueprints used in making Rover 45s were
removed from the deal by Japan's Honda Motor Co, which claimed property rights
over the model. What's left for Nanjing Auto are the blueprints for Rover TF
sports cars and the production lines of all the other models and
engines. Nanjing Auto, a partner with Italy's Fiat SpA, hasn't shed any
additional light on the deal. The Nanjing-based automaker produces trucks
under its own brand and makes vans and cars with Fiat. Its four assembly plants
are able to produce 200,000 units a year. "Nanjing Auto is a government-owned
company, and the Jiangsu provincial government will offer its help," said Zhang
Xin, an auto analyst with Guotai Jun'an Securities Co. "However, the concern is
whether it can run Rover well. It's not easy to manage an overseas
carmaker."
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