HOWZAT

The answer finally came on Friday, April 15, in a letter not to Lomas but Hewitt. The Chinese made it “crystal clear”, according to Lomas, that they were not interested in taking on MG Rover as a going concern.

The 5,000 redundancies were now inevitable. PWC drafted in 85 staff to deal with the workload, while the DTI and local agencies made ready.

“The logistics of processing that number of people was quite challenging. Hewitt had personally intervened to make it clear that everyone had to be on board, and that as much practical help as possible should be given to the workers.”

All the time Lomas and his team had been in close contact with the Phoenix Four, who were the subject of public vilification for having taken hefty salaries and pension payments while running the failing group.

Lomas said the four, led by chairman John Towers, were extremely useful. “To their credit, they gave us a lot of help but did not try to interfere. They helped us to understand what the SAIC deal had been, helped us with developing the interests of other potential bidders, and helped us with commercial decisions on who we needed to finish cars or engines.”

Lomas had warned creditors, whose claims totalled £1.4 billion, that they might get nothing back. The task now was to get the best price for MG Rover’s assets, given that it would not be sold as a going concern.

A mergers-and-acquisitions team from PWC was appointed to run the sale, and a field of about 700 expressions of interest was whittled down to just three: SAIC, Nanjing Automotive Corporation, another Chinese group, and a British consortium led by company doctor David James. It turned out to be a bitterly contested and high- profile auction.

A potential hurdle was property rights. SAIC claimed to own all MG Rover’s important intellectual-property rights, including engine designs, thanks to a £67m deal before the British company’s collapse. PWC had a different view.

Nanjing turned out to be the dark horse. “By the end of June I had an unconditional bid from it for the whole company,” said Lomas.

James came back with an offer for the whole group, but at a lesser amount. SAIC insisted that it only had eyes for Powertrain, the MG Rover engine-making plant.

Privately, SAIC sources were saying that they did not consider Nanjing’s bid to be serious, and that it might not finally materialise. It was not until the last week of the sale that SAIC finally realised it was about to lose out.

“By the end of July I was satisfied that Nanjing could pay, so I was running for the line with their bid while trying to encourage the others to do more,” said Lomas.

“The week before we were due to sign I called them both and said, ‘look, we are very close.’ This finally prompted an offer from SAIC for the whole business. But it was not an unconditional one and not as high as that of Nanjing.

“On the Friday night (July 29) when we were about to sign, the SAIC offer was still conditional and still less than Nanjing. And Nanjing was running out of patience.”

MG Rover was sold to Nanjing, a minor player in the Chinese car market, for £53m.

The sale prompted complaints from the underbidders that PWC had mishandled the process. “In every single case I have dealt with there has been an underbidder who has felt hard done by,” said Lomas.

“If you miss out, you feel aggrieved. But that is why you have to handle the process professionally. No matter what was written about it, I was able to sleep at night.”

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