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Fears grow for MG Rover deal
By James Mackintosh FT.com
Published: March 31 2005 03:00 | Last updated: March 31 2005 03:00


Fears are growing that MG Rover could run out of cash before a deal to rescue Britain's last mass carmaker can be completed, according to people close to talks with Shanghai Automotive Industry Corp.

Due diligence on Rover's liabilities, and the complex legal work to set up a joint venture with China's largest carmaker, has been under way for months.
 

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Why would MGR run out of cash? This is more ********.

MGR Recon they could build RDX60 on there own if the deal fell through, so I don't think they are that close to the edge? are they?
 

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The British Press certainly seem to have it in for MGR at the moment, they are determined to run the company into the ground before the Joint Venture can be formally signed.

Just where did these cash flow rumours come from anyway ? They seem to have sprung up around December/January however the only real information we know of suggests that MGR have quite a healthy bank balance not to mention the partial investment already received from SAIC.

It's a pity MGR can't be awarded damages for slander from the British Press as they'd then be the richest company in the world !
 

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Why do you think they have sold virtually all their land assets , the parts business and having VAT payments deferred, all smacks of a company that is flush with cash!! You need to remember they are building only 115000 cars
instead if 180000 , that must murder the cashflow.
 

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Sorry for being niave, but what is the basis for the crisis I keep hearing about at MGR? Surely they can not being doing any worse than the other car manufacturers? On one hand I hear they are at deaths door, yet on the other hand I am told they have the best selling hatchback in the UK.

Could somebody shed some light?
 

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Unfounded negative press and unfounded panic from certain 'enthusiasts'.

Personally I'm quite excited about the future, the potential for the MG and Rover brands is absolutely enormous, not to mention a few surprises coming our way :dddc:

Most of the British public don't realise the sort of sh!t the likes of Ford and GM are in, if some of their troubles were reported in the same way MGRs are then I'm sure Ford and GM sales would be in free fall !
 

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This is daft... lets just think about this for a minute.

Last year, MG-Rover received £42½ million for the freehold of Longbridge and £100m for their parts division. They have also received an estimated £67m from SAIC from their technology transfer deals. When they last posted accounts, they had over £250m in the bank.

Folks, if this press story is to be believed, the Phoenix Four have managed to squander nearly half a billion in the last year.

If that is actually the case, well it is their money, they can do what they like with it, but come on folks, we were at Longbridge last week. Anyone notice the streets were paved with gold?
 

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boxwellm said:
This is daft... lets just think about this for a minute.

Last year, MG-Rover received £42½ million for the freehold of Longbridge and £100m for their parts division. They have also received an estimated £67m from SAIC from their technology transfer deals. When they last posted accounts, they had over £250m in the bank.

Folks, if this press story is to be believed, the Phoenix Four have managed to squander nearly half a billion in the last year.

If that is actually the case, well it is their money, they can do what they like with it, but come on folks, we were at Longbridge last week. Anyone notice the streets were paved with gold?
Spot on Mike. If they are running out of cash they must have spent it all on something quite significant. :dddc:
 

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yes read my new post tagged to Andymg lastest post

MG ZR VIRGIN said:
Sorry for being niave, but what is the basis for the crisis I keep hearing about at MGR? Surely they can not being doing any worse than the other car manufacturers? On one hand I hear they are at deaths door, yet on the other hand I am told they have the best selling hatchback in the UK.

Could somebody shed some light?
They are doing ok not about to run out of cash and deal to be annouced within two weeks & new car to be unveiled at Paris Motorshow etc etc...
 

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Other are in trouble without negative press

*DLN* said:
Unfounded negative press and unfounded panic from certain 'enthusiasts'.

Personally I'm quite excited about the future, the potential for the MG and Rover brands is absolutely enormous, not to mention a few surprises coming our way :dddc:

Most of the British public don't realise the sort of sh!t the likes of Ford and GM are in, if some of their troubles were reported in the same way MGRs are then I'm sure Ford and GM sales would be in free fall !
How many new C4's have you seen? I pass a Citroen dealer every day and only seen one on my way to work in the last month!! plus Fiat would go under if not for the Panda and Punto as I work in a Tri dealership those are tho only two cars selling and not very well. ln addition Alfa Romeo have only sold one GT and one facelifted 147 in March and are in massive trouble where was the press when that was going on to busy bad mouthing MGR! they missed they real problems too busy making up stories about MGR to notice!
 

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jcn27 said:
Why do you think they have sold virtually all their land assets , the parts business and having VAT payments deferred, all smacks of a company that is flush with cash!! You need to remember they are building only 115000 cars
instead if 180000 , that must murder the cashflow.

MGR have sold a lot of land and are leasing it back. However, these days such practice is quite normal. Somebody elsewhere pointed out that Abbey among others have done this. It's just a sensible freeing up of liquidity tied up in fixed assets.

Dito the parts business. The logistics of storing and distributing parts is best handled by those with expertise.

VAT deferements were offered by the government, and i suppose they would be foolish to say no.
 

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Mr. Mackintosh, who is neither a raincoat or manufacturer of Apple personal computers, is a journalist who is, like all journalists, looking for stories. He has seen his colleague at The Guardian, Mr. ian Grifiths, pick up an award recently for his reporting on MG Rover. Dig, dig, dig (for a story). He has deadlines and dead days...err...Mg Rover, that'll do...! He may even have a ready-to-go MG Rover story always in his drawer, just in case nothing else comes up.

Furthermore, he may be one of those people who enjoy feeling of power and satisfaction gained from stiring up sh** and then watching the users of this site get ourselves in a lather!

A kind of sadist, professional 'troll', if you will! :devil2:
 

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thing is tho the more bad press they get the better if you think about it in the long run - in a few years the press will be going how great mgr came back from all of the troubles they had and produced fantastic cars at fantastic prices. the more they put mgr down the better they will look in the long run
 

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boxwellm said:
When they last posted accounts, they had over £250m in the bank.

Actually it was £213m, and in 2003 they lost £102m altogether including taxes. With sales and output lower in 2004 than in 2003, it's quite feasable that they lost a much more substantial amount than the previous year, which was big in it's own right. Also, they are going to be paying quite a bit for all this "complex legalwork", and it's bound to cost them more to put loads of new spec in the new G models, especially as theyre selling them for less than the ones with less spec. They also had to upgrade the K series engine and a new L series diesel. We dont know how much of this money they invested in RD60, the "drasticly" improved CityRover as they say and other projects they may have started like 75 Coupe, MG GT.
 

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I'm sorry, but the british press really.....Hack me off to put it nicely!

Surely they should be supporting a fellow british company / business!!!
All they seem to do is bulls**t about MG-R which is having a knock on effect. The amount of people in work alone that refuse to have a Rover / MG because of the name its got now and the fact its 'going down' - This is all thanks to the bilge the press are putting forward and prinitng in their papers!

Do they not realise that if (God willing it won't) MG-R went bust, it would have a knock on effect of their business - for one, they won't have anymore lies to spew about MG-R. They'll be moving to the continent next...watch out all you French car manufacturers...you'll be next on the hit list!!!

Rant over!
 

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£250!!!

Spence_MGR said:
boxwellm said:
When they last posted accounts, they had over £250m in the bank.


Due to using an updated shortened 75 platform the new car is going to cost £250 million start to finish which also means a shortened development time! Stop all of the worrying about them going bust and how much cash they have got, the new car is well ahead of anyones predictions and you will see for yourselves in less than two weeks!!
 

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red_flame

I cannot say just know for a fact! been told off for saying too much already just rest assured its all good. I think in two weeks they will go public sorry moderaters she asked! this is me being very very restrained
 

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Okay, Spence, so I got the maths a bit wrong, but we're still talking an order of magnitude of difference between what we think we know and what the press are claiming.

So lets do the maths again. At the end of FY 2003, MG-Rover had £213,000,000 in the bank. They then sold their parts distribution business for £100,000,000, sold their land freehold for £47,000,000 and we guestimate that SAIC have paid £67,000,000 so far under the technology transfer agreement.

In addition to that, I bought a new radio facia for my Rover 75, which cost me £11.75, and a new fuse costing me £1.18. A total expenditure of £12.93.

So adding that all together, we know that they have received £214,000,012.93 to add to their £213,000,000 they had in the bank. That makes a total of £427,000,012.93.

MG-Rover lost £90m in FY 2003. Are you seriously telling me that they've lost £427,000,012.93 since then?
 
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