Phoenix four face pensions high noon

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The Independent Online

Trustees in charge of the MG Rover pension schemes are preparing a legal assault on the Phoenix Four's remaining company to try to secure payments to 6,500 former car workers.

Trustees in charge of the MG Rover pension schemes are preparing a legal assault on the Phoenix Four's remaining company to try to secure payments to 6,500 former car workers.

Independent Trustee Services (ITS), which took control of the three MG Rover pension schemes in April, wants to force Phoenix Venture Holdings (PVH) into administration.

PVH, chaired by John Towers, has escaped insolvency so far as it owns a number of assets, such as a stately home in Warwickshire.

However, PVH's on-going solvency is preventing two of the three MG Rover pension funds qualifying for the Government's new rescue scheme, the Pension Protection Fund.

The trustees face a battle with the Phoenix Four. It is understood that the PVH directors plan to fight any attempt to force their company into administration. A PVH spokesman said: "PVH remains a going concern. I am not prepared to comment further than that for legal reasons."

Hetal Kotecha, a director at ITS, said: "It remains our objective to get the pensions schemes into the Protection Fund. Beyond that, we are unable to comment for legal reasons."

A separate source close to the negotiations said: "It is a case of when, rather than if, PVH goes into administration."

The MG Rover pension funds have an estimated shortfall of £400m. It is understood that trustees will try to prove that PVH is liable for the two pension funds. Because of the funding deficits, this would make PVH insolvent, said a well-placed source.

Former MG Rover workers are confident that their pensions will be safeguarded. A spokesman for the Transport & General Workers' Union said: "There is a bit of a stand off with Towers and Co over whether PVH goes into administration. But the mood here is that our members will get their pensions."

If the schemes enter the Pension Protection Fund, it will pay 90 per cent of workers' pension payments, capped at £25,000 a year.

PricewaterhouseCoopers, the administrator to MG Rover, is studying around 12 credible offers for the company's assets this weekend. It is understood that none of the bids would maintain volume car production at Longbridge.

SAIC, the Chinese company which pulled out of talks to buy MG Rover last month, is one of the bidders. It is interested in some of the assets of the Powertrain engine business, equipment used to build the Rover 25 and 75 and parts of the Longbridge production line.

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