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Impact of MG Rover collapse spreads

Edwards Cars and MG Rover Exports have called in PricewaterhouseCoopers as administrators.

Edwards Cars operates an MG Rover dealership offering new and used car sales plus servicing and spares. It operates from two sites in Stratford-upon-Avon and has 43 employees. In the year ended December 31, 2003 it had turnover of about £7.8m and reported a loss of £968,000.

A PwC statement said: “Following the administration of MG Rover Group, the directors of Edwards Cars Limited felt the company would be unable to meet its financial obligations. Therefore the directors were left with no alternative but to seek an administration order. We will work with management to evaluate the options for the business.”

MG Rover Exports acts as an inter-company purchasing operation between MG Rover UK and dealers networks worldwide (including MG Rover’s eight European subsidiaries which are also in administration).

The administrators intend to continue to trade the business, which has no employees and few non-group creditors, as usual while they explore options particularly in respect of its remaining unsold non-UK specification vehicles.

Steven Pearson, joint administrator, says: “Our appointment as administrators to MG Rover Exports Limited should enable us to supply left-hand drive vehicles to the worldwide market in a controlled way for the benefit of all concerned.

“There are no employees in this business which was put in place in order to assist in the group’s working capital position.”

After following a review of the business at Phoenix Venture Motors, PwC has also closed a further two PVM dealerships, Rednal and Bromsgrove.

However, the remaining six sites (Preston, Chorley, Coventry, Hatfield, Romford and Kidderminster) continue to trade as usual whilst efforts are made to determine the level of interest in each of the sites and the prospects of achieving a going concern sale in each case.

In the meantime, the administrators have launched a sales campaign of discounted vehicles. Each of the sites continues to operate a servicing and repair centre and discounts have also been applied for these services.

“Following a further review of the business, a decision has now been taken to retain six of the 11 dealerships. We have today launched a sales campaign at each of the retained sites with discounts being applied against list prices. Each of the sites will be used as a distribution channel for both new and used MG Rover vehicles whilst efforts continue to secure a long term future for each location," says PwC.

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