Longbridge left on a short-term lease

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The Independent Online

Nanjing, the Chinese car maker that bought MG Rover, will only sign a short-term extension to its lease on Longbridge this month, site owner St Modwen has admitted.

The current contract runs out on 22 February on the 400-acre site near Birmingham. But Nanjing has requested - and St Modwen has agreed - to extend it initially by around six months.

The Chinese company wants more time to draw up a business plan with its UK partner, GB Sports Car, before committing to a long-term contract of around 35 years, said St Modwen's chairman, Anthony Glossop.

He added that Nanjing will get first refusal when the short-term contract runs out. The Chinese company will only take up the option if its business plan is ready.

"They are saying they want more time," Mr Glossop told The Independent on Sunday.

"They have given the intention to stay if they can put together the business plan. They will get flexibility [on extending the contract further]."

It is thought that Nanjing needs £100m to restart production of MG sports cars at the Longbridge plant. Nanjing wants GB Sports Car to buy a majority stake in the venture and provide the bulk of the funding.

The company has scaled back its original plans for the site, which had envisaged employing 1,200 workers.

Nanjing only wants around 105 acres to restart production of the MG sports cars. The rest of the site will revert to St Modwen this month. The property development company is planning a £500m redevelopment of the remainder, building offices, workshops and a technology park for 10,000 workers. Several hundred homes will also be built on the West Midlands site.

Mr Glossop said it would take up to two years to get planning approval for the redevelopment. The company has already had discussions with local authorities, which are keen to see the site redeveloped.

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