Wednesday, April 6, 2005

Carmakers wait for British government on MG Rover loan

Reuters

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LONDON - MG Rover and China's Shanghai Automotive Corp (SAIC) were waiting on Wednesday for the UK government to announce whether it will approve a loan to help secure the future of Britain's last major carmaker.

"We are still waiting to hear from the DTI (Department of Trade and Industry) .... The ball is in their court ," an industry source said.

The government is expected to announce on Wednesday or Thursday whether it will go ahead with a proposed 100-million-pound ($188-million) bridging loan which is seen as crucial to a proposed joint venture between the two carmakers.

Negotiations between DTI officials and SAIC continued late into the night in Shanghai on Tuesday with no breakthrough.

MG Rover's future and 6,000 jobs at its plant in central England hinge on securing an alliance with SAIC to produce cars in Britain and China.

The Chinese company is threatening to walk away from a deal unless MG Rover's owners can provide additional guarantees about its financial security.

No one at the DTI was immediately available for comment.