On this day : BMW ‘demands’ its £10 for Rover (2000)

On this day in 2000, and just weeks after Phoenix Consortium’s buyout of MG Rover, the Sunday Telegraph highlighted how BMW has been left waiting for its £10 payout…

The tale of the missing tenner

The MG Rover tenner

The £10 lifeline deal which convinced BMW to sell Rover almost came unstuck when the Phoenix consortium failed to stump up the cash, it was reported.

Phoenix, then headed by former Rover Chief Executive John Towers, bought the Longbridge car plant in Birmingham from the German car makers on Tuesday for the nominal sum.

But, according to the Sunday Telegraph, BMW was left waiting for the money and its lawyers, Norton Rose, ended up writing to Phoenix demanding the payment.

Misplaced bank note

During negotiations over the future of the car plant a £10 note was set aside for the payment by the group, but it was said to have been misplaced. Phoenix said the slightly crumpled bank note had been recovered and was to be framed and presented to BMW.

The money will have come as a small consolation for the German carmaker. Rover had cost it billions of pounds since its takeover in 1994 and, as part of the deal with Phoenix, it had to give the group an additional £500m between 2000 and 2003 and 80,000 unsold cars worth £1bn to take it off its hands.

Keith Adams


  1. Closing down Rover themselves would have cost BMW a fortune – all the termination payments to employees who’d been their decades the ongoing pension liabilities would have required negotiations with the UK pension regulator, the franchise agreements with dealers would have to be terminated and that would invite legal actions, warranties to be honoured. It would have taken a decade and none of it would have been a tax deduction in Germany. But an arms length loan that goes bad 5 years later – pretty sure that’s a tax writeoff

    • well said, I imagine BMW knew Phoenix had no hope of making MG Rover viable once the loans stopped coming, on their own they would have no investment and the threat of BMW calling in the loans, as well as the ongoing licensing and trademark issues (BMW still owned the Rover name and many copyrights for technology) kept any investor from wanting to come onboard.

  2. What’s not said is the Rover Group had been paying BMWs UK warranty costs for a number of years.

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