John Towers' rival bid for Rover, the embattled British car marque put up for sale by BMW, has been rocked by the revelation of over £30m of losses at his engineering company.
It was confirmed on Friday that Mr Towers, a former Rover chief executive, had approached BMW with an alternative bid to the one tabled by Alchemy, the UK venture capitalist.
However, it has emerged that Concentric, a West Midlands engineering company which numbers Rover among its customers, lost £31.1m in the last financial year. The details were contained in accounts filed at the beginning of this month at Companies House.
And it is understood that BMW has been checking the performance of Concentric to assess the credibility of Mr Towers' interest in Rover. There has been concern that Mr Towers' interest has been motivated by a desire to protect Concentric's contracts with Rover, which would be jeopardised if Alchemy's bid prevails. But sources close to Concentric insisted that since restructuring the company, its exposure to Rover had been vastly reduced. Mr Towers was not available for comment.
Backed by NatWest Equity Partners (NWEP), Mr Towers organised an £87m management buy-out of Concentric in August 1998, taking a 6.3 per cent stake of his own in the private venture. But Concentric's annual losses, which at the time were £3.9m, have since spiralled. NWEP observers insisted that the venture capitalist had not been forced to write off part of its investment.
The battle for Rover, which was put up for sale by BMW following years of escalating losses, will hot up this week when Alchemy reveals further details of its plans. Jon Moulton, managing partner of Alchemy, has been granted a period of exclusive negotiations with BMW. However, his plan to limit production to 40,000 MG-badged cars a year would involve the loss of most of the 9,000 jobs at Rover's Longbridge plant.
Stephen Byers, the Trade and Industry Secretary, has been under pressure to find an alternative, but mystery continues to surround Mr Towers' bid, codenamed Project Phoenix.
Mr Towers has declined to name the financial institutions whose firepower will be vital to the success of his ambitious plans, which would guarantee all but 1,500 of the Longbridge plant jobs.Reuse content