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'Phoenix Four' make £49m offer to save MG Rover

The "Phoenix Four", who own MG Rover's parent, Phoenix Venture Holdings, have pledged £49m in assets to help keep the troubled firm going.

Rover's administrators, PricewaterhouseCoopers said they had a letter committing the £49m from the four executives John Towers, Nick Stephenson, Peter Beale and John Edwards.

PwC also said that the directors have verbally confirmed that in the event that the assets cannot be used to support the companies in administration they intend to pledge their shares in PVH "for the benefit of employees and their families". A trust has been created which will be known as the "Phoenix Trust". It will hold all beneficial rights to the 40% shareholding held individually by the four men.

Initially, the voting rights associated with this shareholding will be retained by the four shareholders, whilst matters become clearer. However, it is intended that these rights will pass to the trust.

The trustees will be given complete discretion to allocate any funds in the trust to help the families and dependants of the Longbridge workforce.

Towers says: "It is not yet clear what the value of the PVH shares is. PVH has significant assets totalling around £50 million but we believe a reasonable estimate of its present value is between £10 million and £30 million. However it is important to note that this value is subject to attack by 3rd parties associated with the administration of other parts of the PVH Group."

However, PwC said there were a number of legal hurdles that would have to be overcome before the "Phoenix Four" could make the remaining assets of the MG sports brand, the Rover 45, production line and workforce available as collateral to help secure loans for Rover.

Last week, SAIC pulled back from investing large sums in the Birmingham-based carmaker, but PwC says its circumstances have changed since going into administration.

The Government has loaned MG Rover £6.5m to pay staff wages for a week.

But administrators and the unions said it could take three weeks to do a deal, meaning at least £13m more would be required.

The assets of the four could help to raise loans to keep Rover afloat while a deal is negotiated. The Financial Times said the £49m in assets pledged by the Phoenix Four included Studley Castle in Warwickshire, £1m in cash and £25m in ‘collateralised cash’.

"We are realistic in our expectations here," PwC partner Tony Lomas told a press conference. "It is a really complex deal to put together and it will take some time."

The administrators of MG Rover said yesterday, time was their greatest enemy in their efforts to revive a collaboration with SAIC and secure the future of the troubled carmaker.

PwC executives said the Chinese vehicle maker still had much to gain, dismissing claims that SAIC had cherry-picked MG Rover.

PwC executive, Steven Pearson said "the fundamental value of the business is in its know-how" and that although SAIC owned intellectual rights for the Rover 25 and 75 "it does not have the technical capacity to make them".

PwC has announced that it has received ‘less than a dozen’ approaches for MG Rover, including one from Jon Moulton, a London-based venture capitalist who failed to buy MG Rover five years ago.

The skilled workers that face redundancy have been offered the chance to move to Australia where there is a current shortage of skilled workers.

The Australian Visa Bureau is appealing to skilled workers under the age of 45. Under the AVB’s points system, skilled tradespeople are given priority processing.

AVB spokesperson Oonagh Baerveldt said engineers and those working as automotive electricians, fitters, fabricators, machinists, tool makers, motor mechanics, panel beaters, sheet metal workers, vehicle painters, welders and air conditioning mechanics were most in demand.

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