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MG Rover dealers left £48m out of pocket

MG Rover dealers will be left £48m out of pocket following the announcement this month from the carmaker’s administrator that its creditors are likely to get nothing.

Finding a buyer is looking increasingly unlikely, and administrator PricewaterhouseCoopers is considering breaking up the business this summer.

Following a creditors meeting last week, PwC says there is still little sign of a rescue package materializing, and that the company’s fate is now measured in weeks rather than months.

Of the nine parties interested in purchasing the carmaker, only three – all from outside the UK – have considered buying MGR as a going concern.

“The worst case scenario is that MG Rover creditors will get nothing,” says Tony Lomas, joint administrator, who says that as far as PwC can tell, MGR never traded while insolvent. “We are running out of time and money. Assets will be auctioned to the highest bidder if the company cannot be not sold.”

Dealers have been prepared for bad news, according to Richard Cort, chairman of the MG Rover Franchise Board.

“There’s no real shock because rarely when a company goes into receivership do you get anything,” he says. “It’s each individual business’s responsibility now to formulate a business strategy to ensure survival.”

MGR showrooms in St Helens, Widnes, Warrington, Barnsley and Huddersfield are now on the market after Drive Direct went into receivership.

Two showrooms were dual branded with Kia. Drive Direct also had one Fiat site, two Car Depot used centres and an auction business. Kia and Fiat are now looking for representation.

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