David James, the corporate troubleshooter trying to mount a rescue bid for MG Rover, has asked the administrators to the bankrupt company to give him five more days to find funding for a takeover.
As PricewaterhouseCoopers continues its intense negotiations with Mr James and two other Chinese bidders for the collapsed car maker, Mr James has requested that PwC hold back on reaching a conclusion until the middle of next week, by which time he hopes to have secured funding for his proposals.
"We are pleading with the administrators that they do not pull the shutters down on this before Wednesday, when I should know whether I have the financing in place", he said. "They must keep the shop open."
Hopes of receiving government funding were fading last night. Yesterday afternoon, the Department of Trade and Industry passed over the request for about £50m of funding to the Secretary of State, Alan Johnson, to consider, but Mr James has been warned "not to be too hopeful" of success. He is scouring the financial markets to find other sources of funding. "We are now also looking in the independent financing markets outside of government," he said.
Mr James is up against stiff competition after Shanghai Automotive (SAIC) and the former head of Ford Europe, Martin Leach, joined forces this week for a joint bid. They have the support of the T&G union, which believes that the SAIC and Leach consortium is the only offer that will bring back large-scale production to Rover's Longbridge plant. Also competing for Rover's assets is another Chinese car manufacturer, Nanjing.
Mr James plans to keep the MG sports car business at Longbridge, resurrecting the production lines that had to close in April as the company crumbled under its debts. He then hopes to sell off the Rover and Powertrain divisions to a buyer who wants to set up car production businesses in the UK. He wants the Government to provide a guarantee to fund any shortfall if he fails to sell the businesses for a high enough price to cover the loan. "There are issues with European rules on the Government doing this kind of thing, but we have been studying the rules and we believe there are allowances for this type of situation," Mr James said.
Other sources close to the negotiations believe a decision from the administrators was always unlikely before the middle of the week. Tony Lomas, one of the administrators, said on Thursday the negotiations were proving lengthy, complex and time consuming.Reuse content