MG Rover Deal Under Threat

Just as I suspected, reports are coming out that Shanghai Automotive are suspicious about the recent buyout of MG Rover, by its fellow countrymen Nanjing Automotive. According to a report by the BBC, SAIC is unhappy with the "discriminatory" decision and may take legal action.

In the report, PwC administrator Tony Lomas said the deal with Nanjing, China's oldest carmaker, was rock solid. He said: "Nanjing has paid a non-refundable deposit and there will be a letter-of-credit payment in respect of the rest of the money," he told the BBC. "It is an unconditional contract."

Industry insiders claim Nanjing Automotive, which specializes in the building of trucks, lacks the financial clout to produce new MG Rovers in the UK and keep the company out of trouble. So far I have not read anything coming out of the Chinese firm to counter these claims and so one wonders if these rumors hold any water.

Watch this space.