Former MG Rover workers set to share in £44m payout
Thousands of former MG Rover workers are set to share in a £44 million payout for creditors more than a decade after the car company's collapse.
Around 6,000 workers lost their jobs and hundreds of companies that supplied MG Rover's Longbridge factory were left out of pocked when the company collapsed in 2005 with debts latest estimated at £1.6 billion.
Accountants PricewaterhouseCoopers, now known as PwC, were called in as administrators to try and raise as much cash as possible from the failed business to pay off creditors.
More than a decade later, PwC is still acting as administrator and chasing down claims to try and recover more money for unsecured creditors.
And the accountancy has struck gold in Germany where an MG Rover subsidiary was based.
It will mean those creditors will get a payout equivalent to around half the amount they have already received over the years.
Matthew Hammond, PwC's Midlands regional chairman, said: “We have clawed back an extra £44 million for creditors, including many former employees. This money was recovered from the German liquidator of an MG Rover subsidiary company.
"This will mean that by the end of 2018 we should be able to distribute further monies to the 5,300 creditors which will be equivalent to another 50 per cent of what they've already received, a good result at this stage of a liquidation process."
It will bring the total amount recovered since the collapse to around £200 million, which is thought to be equivalent to around 15p in every pound owed to creditors.
Over the last 13 years the PwC liquidators have continued to work alongside a creditors’ committee, made up of trade suppliers, credit insurers, the dealer network, the Pension Protection Fund and former employees.
The collapse of MG Rover cost thousands of jobs and brought many other companies to their knees with the loss of vital work from what had been one of the UK's biggest car factories.
The historic company had come close to the brink in 2000 when it was bought from owner BMW by Phoenix Venture Holdings – four businessmen later dubbed the Phoenix Four – for a nominal £10.
Over the next five years the four – John Towers, Nick Stephenson, Peter Beale and John Edwards – paid themselves £42 million in pay and pensions before the company finally collapsed in 2005 with massive debts. With former chief executive Kevin Howe they were accused by a Department of Trade and Industry inquiry in 2009 of management failings. The Phoenix Four subsequently agreed to be banned as directors for a combined 19 years.
Over the next decade PwC managed to raise £165m from the liquidation of MG Rover, and by 2015 £80m had been returned to creditors - almost 10p in the pound. Some 4,000 claims from former employees had also been agreed and paid in full.
At the time Rob Hunt, one of the original team of three PwC administrators, said: “MG Rover was part of the engine house of the Midlands economy and it was a major shock to witness its demise."
Meanwhile the vast 468 acre Longbridge factory site has been largely demolished and redeveloped to create a new town centre.