MG-R Saga Continues: SAIC considers legal action against Nanjing

[nadepalma]

Source: http://www.nzherald.co.nz/index.cfm?...ectID=10337458

Spurned Rover bidder SAIC considers legal action

LONDON - Shanghai Automotive Corp. (SAIC), the Chinese carmaker that lost out on Friday in the bidding process for Britain's MG Rover, said on Sunday it was considering a legal challenge to the administrator's decision to sell Rover to compatriot Nanjing Automobile.

"We are considering all options including legal action," said an SAIC spokesman, holding out the prospect for a rare legal clash between China's biggest carmaker SAIC and China's oldest automaker Nanjing, both of them state-owned.

The long-awaited deal follows the collapse of MG Rover in April under debts of £1.4 billion ($3.62 billion), with the loss of 5000 jobs after the carmaker was forced to close its production plant at Longbridge in central England.

The SAIC offer, tipped to win the bidding war, was favoured by unions who believed it offered the prospect of creating the most jobs in Britain.

"SAIC has put in a superior offer, with better prospects for employment and UK car production, and it has been denied the ability to have its final offer considered," said the SAIC spokesman.

Administrator PricewaterhouseCoopers, which chose Nanjing over SAIC, declined to comment on SAIC's talk of legal action.

Nanjing said on Friday it would relocate MG Rover's engine plant and some car production to China and promised to employ up to 2000 UK workers as it partly revives production of the venerable brand.

It aims to produce at least 80,000 MG saloon and sports cars within five years, and develop a research and development facility.

"We were very satisfied with the process and have nothing more to say," said a spokeswoman.

A source familiar with the situation said Nanjing's purchase price was between £50 million and £100 million.

SAIC, which pulled out of a joint venture expected to save the carmaker earlier this year, had launched a joint bid with a consortium headed by former Ford Europe boss Martin Leach for MG Rover's assets.

Newspapers quoted industry sources saying the SAIC bid had too many preconditions and lacked clarity, an assertion that SAIC denied.

"The lack of clarity is that neither offer has been published by the administrator, so that nobody is able to see," said the spokesman.

SAIC already owns the rights to build the Rover 25 small car and Rover 75 saloon.