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Rover Rises from the Ashes like a Phoenix

9 May 2000

Phoenix Consortium Strikes Deal with BMW to Rescue Rover

    London - John Towers, the former Rover CEO, and his Phoenix Consortium 
were finally successful in putting together a deal with BMW to save the 
financially troubled Rover Motor Cars.  An agreement was signed earlier 
today in London.

    The deal doesn't actually sell Rover and its Longbridge plant to Phoenix, 
but licenses them to take over the design, development, production, and 
distribution of several Rover models.  The Rover brand will continue to be 
owned by BMW.  However, Phoenix did reportedly acquire the MG badge, and 
they will also take over the production of the MGF and the 'old' Mini.  The 
'new' Mini, BMW's highly trumpeted redesign of the Mini Cooper, will remain 
under the control of BMW.  Land Rover is being sold to Ford, and will 
therefore not be part of the Phoenix/BMW deal.

    Financially speaking, Phoenix will pay BMW only about $16.  But, Phoenix 
had to prove that they had sufficient backing to handle the costs and 
expenses involved in taking over Rover.  Stories on THE AUTO CHANNEL during 
the last few days chronicles some of the efforts in arranging for the 
funding.  Abby National (UK) and First Union (US) are apparently two of the 
banks involved.  BMW will also provide Phoenix with about $760 million in 
repayable credits to help cover some of the costs.  A complete closure of 
Rover could have cost BMW nearly $2.5 billion.

    Although the Phoenix/BMW will save thousands of jobs, it is expected that 
about one thousand will be lost.

MJR