MG Rover to give shares to retailers

MG Rover chief executive Kevin Howe this week dismissed press reports that Phoenix consortium head John Towers is in talks to sell the company to a rival manufacturer. Mr Howe said: “We are in it for the long haul.”

Next month MG Rover is set to give 35% of its shares to employees and 25% to dealers, to encourage stability. Mr Towers, and the other three founders of Phoenix, would share the remaining 40%.

Mr Howe's comments came as BMW rejected MG Rover's plea for additional funding. Failing sales, a weakened euro and lower residuals have hit the value of the 50,000 cars Rover inherited from BMW.

Mr Towers has also reportedly faced boardroom unrest over his production targets. He denied that some non-executives wanted to scale down plans to make 200,000 cars a year at Longbridge.