Phoenix Consortium's Bid for Rover Cars Gains Momentum

Strategic Insights -

ABB National's backing of the Phoenix consortium with Pounds 500m has lifted hopes that the closure of Rover cars can be averted. The consortium, fronted by John Towers, the former Rover chief executive, has also secured financial guarantees from BMW and Abbey National, with Pounds 1.2 billion in finance in place. However, some senior ministers remain skeptical about the bid's viability, with Alchemy's collapsed bid leaving the future of Longbridge and Rover's Swindon body panels operation uncertain.

Key Takeaways:

  • The Phoenix consortium has secured Pounds 500m from Abbey National and a further Pounds 500m from BMW to back its bid for Rover cars.
  • The consortium has guaranteed Pounds 1.2 billion in finance, with Abbey's First National Finance subsidiary providing Pounds 500m.
  • English Partnerships, the government urban regeneration agency, is working on a deal to secure the remaining Pounds 200m, with the possibility of buying the Longbridge plant for Pounds 200m and leasing it back at a peppercorn rent.
  • Phoenix has signed deals with Honda and Volkswagen to provide platforms for its operation at Longbridge, with Ford also showing interest in the project.
  • Werner Samann, Rover's chairman, has issued a challenge to those opposed to the Alchemy bid, calling for support and contributions from all parties to reach a quick and sound solution.
  • Nomura and HSBC have expressed interest in underwriting the final Pounds 200m provided due diligence shows the bid is viable.
  • The original bid has been modified, with the output target lowered from 250,000 cars a year to 150,000.
  • Motor-industry insiders report fresh manoeuvring by Ford and Volkswagen, with Wolfgang Reitzle, the head of Ford's Premier Auto Group, believed to have recently met Fahd Ferdinand Piech, VW's chairman.

Statistics:

  • Pounds 1.2 billion: the total amount of finance guaranteed for the Phoenix consortium's bid.
  • Pounds 500m: the amount of finance provided by Abbey National.
  • Pounds 500m: the amount of finance provided by BMW.
  • Pounds 200m: the remaining amount of finance required to secure the bid.
  • 150,000: the revised output target for the Phoenix consortium's bid.
  • 12 days: the time given to the Phoenix consortium to complete its bid.
  • Pounds 1.9 billion: the amount paid by Ford for Land Rover.
  • 250,000: the original output target for the bid.

Sources:

  • The Sunday Times, May 14, 2000
  • Agenda, page 2
  • Additional reporting by David Sumner Smith