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Jon Griffin, Birmingham Post, 24th July, 2009

Months of talks over a crucial loan guarantee by the Government to loss-making Jaguar Land Rover have been stretched to breaking point – 24 hours after a deal appeared within reach. A letter leaked by the Government to the Birmingham Post’s sister newspaper the Coventry Telegraph has left the discussions “in limbo,” with JLR owners Tata reportedly furious at Lord Mandelson’s Business Department.

The leaking of the letter has caused a near total breakdown in trust between the two parties at a point when they were closer to an agreement than at any stage in the three months plus of detailed negotiations. Tata bosses have been infuriated by the publication of the letter in which Lord Mandelson calls on the Indian group for “face to face negotiations” to end delays in the long-running talks.

The letter, dated July 16, says: “As we discussed, I am concerned at the lack of pace on the Tata side in considering the negotiations on possible UK Government support to Jaguar Land Rover. In order to move along these important discussions, I would ask you to urge your colleagues at Tata Motors to respond to our revised team sheet that was sent to Ravi Kant on 7 July as soon as possible. It would be helpful if a representative from the company, with appropriate authority, is available in the UK from early next week to conduct face the face negotiations so we can reach a conclusion as soon as possible.”

The leaked letter came just days after Lord Mandelson went on Sky TV calling on Tata to “quicken the pace” of talks over a guarantee to the £340 million European Investment Bank loan first unveiled in early April.

It was bad enough Mandelson going on TV after doing nothing for 10 months and saying Tata had to hurry up but to then see private correspondence leaked – how can you trust these people? The Government are at risk of destroying these whole discussions. This has shaken Tata’s confidence. The Government has asked Tata not to negotiate in public and they stood by that but Mandelson has not. Only one party in these discussions has been dragging its feet and that is the Government.” A source close to Tata Motors’ negotiations with the UK Government

However, a source close to the negotiations said: “Quite simply, the Government appears to be on a different planet. Relations are frosty – the talks have been disrupted by the Government’s decision to leak details of what has been going on because it has undermined trust.

“It was bad enough Mandelson going on TV after doing nothing for 10 months and saying Tata had to hurry up but to then see private correspondence leaked – how can you trust these people? The Government are at risk of destroying these whole discussions. This has shaken Tata’s confidence. The Government has asked Tata not to negotiate in public and they stood by that but Mandelson has not. Only one party in these discussions has been dragging its feet and that is the Government.”

The Government has already indicated that they are only willing to pledge guarantees of £175 million of the £340 million on offer from the EIB, and JLR may now have to seek other avenues of finance to help stem losses.

Meanwhile, further production cutbacks are likely following Tata Motors Vice-Chairman Ravi Kant’s warning last month that “plant shutdowns” could not be ruled out. JLR has already lost £281 million in the first 10 months under Tata.

[Source: Birmingham Post]

Jaguar Land Rover Jaguar Land Rover, JLR, Lord Mandelson, Ravi Kant, Tata Motors

Jon Griffin, Birmingham Post, 24th July, 2009

The last remaining assets of the UK’s once most famous factory are being slowly realised – with up to £8 million still to be raised from the ashes of the Longbridge empire. Millions of pounds of assets are still tied up in MG Rover’s network of overseas import companies, more than four years on from the closure of the factory.

The money, which will add up to £8 million to the £42.6 million already raised for creditors by Administrators PricewaterhouseCoopers, relates to MG Rover overseas subsidiaries in continental Europe, including France, Germany, Italy and Spain. The value of the overseas network is revealed in the latest Joint Liquidators Report into the £1.4 billion collapse of Longbridge compiled by the Administrators.

Administrator Rob Hunt said in the report: “The principal assets for the Liquidators to realise have been the company’s loan and investment interests in subsidiary companies. These subsidiary companies are subject to insolvency proceedings and the timing of distributions from them depends upon when their respective office holders have realised sufficient assets and agreed their claims.

“As the assets being realised by the subsidiary companies continue to include interests in overseas companies which are also subject to insolvency proceedings, it is difficult to predict when that work will be completed. I estimate that between a further £5  million and £8 million should be realised by the company in respect of its interests in subsidiary companies.”

The estimated sums relate to about ten import companies across Europe owing money to MG Rover at the time of the firm’s closure in April 2005. However, many trade creditors are missing out on a £40 million fund, with an unspecified number of potential claims from the UK and overseas worth an estimated £464 million still to be considered by PwC.

[Source: Birmingham Post]

MG Rover Longbridge, PricewaterhouseCoopers, PwC, Rob Hunt

Jon Griffin, Birmingham Post, 23rd July, 2009

A long-awaited deal to seal Government guarantees over a crucial £340 million European Investment Bank loan for Jaguar Land Rover is finally within sight. More than three months of negotiations over the Government stamp of approval for the Euro loan are said to be drawing to a close with an agreement on the horizon, it has emerged.

Hopes of a potential deal rose just days after Business Secretary Lord Mandelson urged JLR parent group Tata to “quicken the pace” of negotiations over the loan, which will help the loss-making car firm through the automotive sector’s worst recession for 40 years.

Tata recently announced losses for JLR of £281 million for the first ten months under the Indian group’s ownership as the downturn led to a dramatic slump in sales. Tata Motors Vice-Chairman Ravi Kant has warned that further job cuts, to add to the 2,000 already shed, and “plant shutdowns” were likely to offset the continuing losses.

However, a well-placed source said yesterday that the Government talks were at last close to a breakthrough following weeks of lengthy negotiations.“It’s fair to say that a deal on JLR is edging closer. We are talking about weeks, not months now, maybe within the next two weeks,” he said.

The source criticised the Government for “publishing details of negotiations that were supposed to be confidential.” He claimed even the European Investment Bank had become “fed up with the Government’s stalling tactics. The Government is living on a different planet. There appears to be a view that, as Tata is an Indian company, they might take the money and run. That is insulting and shows a complete lack of trust.”

“The Government appears to have dropped their most contentious demands, including board representation and a veto on major decisions. It appears that, on those contentious issues, there is more of an alignment. It is a changing scenario and that has probably been down to the pressure put on by the Select Committee and other MPs.” The source said the announcement that 300 jobs were being lost at Halewood following the end of production of the X-Type “appeared to have concentrated the minds of the Government.”

Last week Lord Mandelson said: “I am waiting for the owners, Tata Motors, to come back and make their response to the offer of financial support the Government has made. Jaguar Land Rover know that, were they to reach the point where they needed Government assistance, they could say so and we will be there. That point has not been reached.”

The source criticised the Government for “publishing details of negotiations that were supposed to be confidential.” He claimed even the European Investment Bank had become “fed up with the Government’s stalling tactics. The Government is living on a different planet. There appears to be a view that, as Tata is an Indian company, they might take the money and run. That is insulting and shows a complete lack of trust.”

[Source: Birmingham Post]

Jaguar Land Rover Jaguar Land Rover, JLR, Lord Mandelson, Ravi Kant, Tata Motors

Jon Griffin, Birmingham Post, 23rd July, 2009

Many trade creditors hit in the pocket by the collapse of Longbridge are missing out on a £40 million-plus nest egg – more than four years on from the demise of MG Rover. An unspecified number of potential claims from the UK and overseas – worth nearly half a billion pounds – have not materialised since the Birmingham car firm closed in April 2005, it was revealed yesterday.

Administrators PricewaterhouseCoopers disclosed in the latest Joint Liquidators Report that up to £464 million of further claims could still be admitted despite the increasing time gap. With two dividends amounting to a total of 6p in the pound already paid to approved claimants some creditors are forgoing sums of many thousands of pounds.

MG Rover Administrator Rob Hunt said: “If you look at our receipts and payments, we are still sitting on just over £40 million. There are quite a number of creditors who still have not made claims. As time goes by, the chances of those coming through are less and we will get to the point where we will take the view that they are not going to claim. I think what has happened here is that a number of dealers will have made claims at the start of the insolvency in respect of loss of profits but those claims have not materialised.”

If you look at our receipts and payments, we are still sitting on just over £40 million. There are quite a number of creditors who still have not made claims. As time goes by, the chances of those coming through are less and we will get to the point where we will take the view that they are not going to claim. I think what has happened here is that a number of dealers will have made claims at the start of the insolvency in respect of loss of profits but those claims have not materialised.” Rob Hunt, Administrator, MG Rover Group Limited

Mr Hunt said a cross-section of suppliers, dealers and other trade creditors had failed to carry through claims, or not claimed at all despite the fund amassed by Adminstrators from Longbridge’s remaining assets.

The latest Joint Liquidators Report says: “Significant claims in excess of the values listed in the directors’ Statement of Affairs have been received and are still being adjudicated upon, and many potential claims from the UK and overseas have not been received. The Liquidators estimate that up to £464 million of further claims may be admitted.”

The report reveals that two dividends of 4.5p and 1.5p in the pound have been paid out – including average sums of £400 and £150 to 4,500 ex-workers – and at least one more payment is likely. The MG Rover Pension Fund already stands to benefit to the tune of around £20 million after Administrators admitted a claim of £352 million.

A total of 1,250 unsecured creditors, including traders, supply firms and dealers, were left out of pocket when MG Rover collapsed with debts of around £1.4 billion in April 2005.

[Source: Birmingham Post]

MG Rover Longbridge, MG Rover Pension Fund, PricewaterhouseCoopers, PwC, Rob Hunt