Phoenix study Rover accounts ahead of negotiations

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The Independent Online

The detailed package of financial documents which could save Longbridge from extinction was finally couriered from BMW's London offices into the waiting hands of the Phoenix consortium yesterday.

The papers unravelled the complexities of Rover's finances, its production costs, and its losses, estimated at £2m a day, at the West Midlands plant. The package could prove that the Phoenix consortium can rescue Longbridge, and the nearly 50,000 jobs dependent on it, or it could finally ruin its chances.

The small group of West Midlands businessmen, car makers, ex-Rover executives and financiers who make up Phoenix have a daunting task. They have until tomorrow morning, when they hold their first meeting with BMW as fully-fledged bidders for Longbridge, fully to master the papers' contents. They have to persuade BMW's sceptical executives they have the competence and backing to pull it off.

Ministers and union leaders, while desperate for Phoenix to succeed, are also sceptical. Rover is haemorrhaging money, the strength of sterling undermines its exports, and it has to survive in a competitive market.

The campaign of persuasion began badly yesterday when the high-street bank Abbey National denied press reports it had agreed to finance Phoenix's bid with £500m. "There is no truth in this whatsoever," a spokesman said.

The speculation highlighted the absence of the big-name banks needed over the medium term to rescue Longbridge and reassure BMW. Although sources insist there are several "finance houses" involved, the only names publicly available are on the management and engineering side.

John Towers, 52, the most public figure in Phoenix, was chief executive at Rover until BMW bought it in 1994. At Rover he was credited with demanding a coherent family of cars and with building its car-making alliance with Honda.

Like several of his associates, his interest in saving Longbridge is not entirely nostalgic. He runs Concentric, a Birmingham-based car-parts company that relies heavily on Rover for its business.

Alongside him are executives at the small but exclusive Lola racing-car firm, including Nick Stephenson, formerly a senior design and research executive with Rover responsible for special projects.

Major industrial backing comes from Mayflower, a bus and coach-builder which bought the bus-makers Dennis in 1998. It has interests in the United States and Germany and had a turnover last year of £702m.

Rover dealers are represented by John Edwards, owner of the Stratford-based Rover main dealership Edwards Cars, and his finance director, Peter Beale. They are joined by Brian Parker, who is described as a Midlands-based financier.

Phoenix has also attracted backing, in a supporting role, from West Midlands politicians, including from Mike Whitby, the deputy Tory leader on Birmingham City Council.

Until last week its most prominent spokesman was John Hemming, a millionaire Liberal Democrat councillor from Birmingham whose business interests come from computer software and from e-commerce.

Mr Hemming's experience underlines Phoenix's credibility problems. He is credited as a leading figure in setting up the bid but was eased out last week, with rumours circulating of tension over the presentation of Phoenix's case.

"He's not a spokesman for the consortium," a source emphasised yesterday. With council elections due on Thursday, and given Mr Hemming's parliamentary ambitions, there have been questions about his true motives.

Mr Hemming resents these questions. Despite the widespread criticism of the Government's handling of the Rover débâcle, he insists he has resisted scoring political points from the Longbridge crisis. "I have had plenty of opportunities to make political capital from this and I haven't done so once," he said. Despite the doubts, Mr Hemming is adamant Phoenix can do the job it claims. "It has the expertise and it has the finance. I get a bit irritated by people based in London slagging off people with the track record in Birmingham and saying they're incapable of doing a business they've done before."