BY ANTONY HOPKER
Rover has been plunged back into uncertainty follow the dramatic collapse of Alchemy’s deal to buy the troubled firm. The venture capitalists announced today that they had pulled out of talks to buy the company from BMW.
BMW say they will decide Rover’s fate within the next four weeks. The firm says it will let the rival Phoenix bid have more time to prepare its finance, but have not ruled out closing the Longbridge site.
A brief statement said a dispute over ‘contractual matters” had caused the negotiations with Alchemy Partners to collapse.
Alchemy had been expected to seal the deal within the next few days
The statement, headed Alchemy and BMW Terminate Rover Talks, read: “Alchemy Partners and BMW have ceased negotiations as they were unable to agree upon certain contractual matters, some of which arose yesterday.
“Alchemy Partners thanks BMW for its constructive and cordial negotiations and wishes Rover and its employees well in the future.”
They were planning to turn the Longbridge plant into a small operation making sports cars and thousands of redundancies were expected.
BMW’s share price plunged 7 per cent on the news. Rover Group is losing £2 million a day and the German company is desperate to offload it as quickly as possible.
The turn-about paves the way for a rival Phoenix bid led by former executive John Towers to buy Rover.
Phoenix has promised that fewer jobs will be lost. The group, which has inadequate financial backing according to BMW, has pledged to continue mass production, but will halve output.
Sir Ken Jackson, general secretary of the Amalgamated Engineering and Electrical Union, said:
“Once again the workforce is being kicked around while BMW ponders its future. All this is leaving our members dazed and confused and we are being kept in the dark.”
Thousands of people had demonstrated against Alchemy in recent rallies in Birmingham.
Coventry councillor Dave Nellist said the cost to workers’ jobs would be huge if Alchemy had taken over as they were ‘asset-strippers”.
Analysts at Coventry City Council said a total of 1,500 jobs in the city would be at threat from the scaling-down at Longbridge.
Carl Chinn, who joined a union delegation to see BMW bosses in Munich yesterday, said: ‘The public pressure is having an effect on BMW.”