Phoenix Venture Holdings
||This article may be in need of reorganization to comply with Wikipedia's layout guidelines. (January 2014)|
|Industry||Automobiles and MG Rover|
|Founded||2000 - 2006|
|Headquarters||Longbridge (Birmingham) and Cowley (Oxford)|
|Key people||John Towers, Peter Beale, Nick Stephenson, and John Edwards|
|Subsidiaries||MG Rover & Powertrain Ltd|
Phoenix Venture Holdings (PVH), also known as the Phoenix Consortium, is a British company formed by four businessmen (John Towers, Peter Beale, Nick Stephenson and John Edwards). Following BMW's break-up of the Rover Group a financially complex deal involving a £500 million "dowry payment" from BMW, resulted in PVH purchasing the Rover marque in May 2000 for the notional sum of £10, relaunching the car company as MG Rover. MG Rover and related companies placed themselves in administration on April 8, 2005.
Four years later and after spending £16m the Government finally released the report investigating the collapse of the company. The report, which was only concerned with dealing with the directors and their actions while MG-Rover Group was still trading, revealed that the five executives involved took £42m in pay and pensions from the troubled firm before it collapsed.
The report also commented on the personal relationship between Nick Stephenson and Dr Qu Li, who was paid more than £1.6m in the 15-month period up to April 2005 for consultancy services. Additionally, fellow Director Peter Beale was accused of installing a software application, Evidence Eliminator, which may have destroyed documentation relevant to the investigation. The investigators further accused Mr Beale of giving "untruthful" evidence during interviews.
In return the Directors have accused the findings of being a whitewash and a witchunt, and it remains unknown the exact details of the actions of key Government Ministers at the time of the collapse.
Conservative business spokesman Kenneth Clarke said it was right the report criticised the Phoenix Four, whose behaviour was "disgraceful". Lord Mandelson said the Phoenix group had not shown an "ounce of humility" about the firm's demise and they owed an apology to the firm's employees and creditors. However his comments that steps will be taken to disbar the five executives have been discredited, and the report at no point uses language stronger than 'inappropriate' in describing the activities of the Group Directors.
Phoenix Venture's main trading businesses are/were:
- Studley Castle Ltd.
- MGR Financial Ltd. - joint venture with the Royal Bank of Scotland
- MG Rover Exports Ltd. - administered by PriceWaterhouseCoopers
- Phoenix Distribution Ltd. - administered by PriceWaterhouseCoopers
- Phoenix Venture Motors Ltd. - administered by PriceWaterhouseCoopers
- MG Rover Group Ltd. - administered by PriceWaterhouseCoopers, assets sold to Nanjing Automobile
- Powertrain Ltd. - administered by PriceWaterhouseCoopers, assets sold to Nanjing Automobile
- MG Sport and Racing Ltd. - administered by PriceWaterhouseCoopers
BMW had acquired the Rover Group in 1994, but by 1999 it had become a major financial liability. Since September 1999 the venture capital company Alchemy Partners, run by Jon Moulton and Eric Walters, had been in talks with BMW about acquiring Rover. When news of the talks became public on March 16, Alchemy was widely expected to take control of MG and Rover. By that time, it was already decided that BMW would retain Mini and sell Land Rover to Ford. Alchemy intended to name the company the MG Car Company, selling the MG F roadster and possibly developing additional, limited production sports cars. The Rover brand would have been dropped and all volume production abandoned. Jon Moulton withdrew the Alchemy bid when the Government added extra conditions to the sale, and a march through Birmingham led by Prof Carl Chinn opposed the Alchemy bid
On April 6, 2000 John Towers — the most prominent of the four men known as the Phoenix consortium — presented a counter-offer to BMW. The Transport and General Workers Union (T&G), the UK Department of Trade and Industry (DTI), and the British public in general all threw their support behind Towers and the Phoenix Consortium, as Phoenix were the only potential bidders proposing to retain high-volume car production and full employment at the Rover plant in Longbridge, Birmingham. On May 8, following a last-minute injection of finance from the First Union Bank of North Carolina, a deal with Phoenix was agreed. The sale occurred on May 9.
Due to UK regulations that hold the prior owner of a company responsible for all redundancy payments if the said company declares bankruptcy within 3 years of sale, BMW guaranteed that Phoenix Venture Holdings (initially named MG Rover Holdings) would have enough money to keep Rover Group in business for at least 3 years following the sale. The agreed "dowry" from BMW was made up of a £427million interest-free loan and stocks of cars.
Kevin Howe was appointed MG Rover's managing director in July 2000.
Phoenix's short-term plan was to expand the MG range with sporting versions of existing Rovers, introduce new versions of the Rover 25 model, re-engineer and redesign the MG F, and eventually replace the entire model range with new cars developed through joint venture. Sadly, the new models would never reach showrooms. However, the consortium continued to enjoy strong UK press support for several years following the Phoenix coup.
For accounting purposes, Phoenix Venture Holdings also includes various non-trading subsidiary companies that exist in name only.
These businesses include:
- MG Rover Cars UK Ltd. - incorporated March 22, 2005;
- MG Rover Powertrain Ltd. - incorporated September 24, 2003;
- MG Rover Lease Plan Ltd. - incorporated January 23, 2002;
- MG Rover OUV Ltd. - incorporated January 23, 2002;
- MG Rover Group Trustees Ltd. - incorporated April 30, 2001;
- MG Rover Group Senior Trustees Ltd. - incorporated April 25, 2001;
- MG Rover Group Contract Trustees Ltd. - incorporated April 24, 2001;
- MG Rover Executive Trust Company Ltd. - incorporated October 5, 2000;
- MG Rover Heritage Ltd. - incorporated October 5, 2000;
- MG Rover Property Holding Ltd. - incorporated October 5, 2000;
- MG Rover Dealer Trust Company Ltd. - inorporated June 9, 2000;
- MG Rover Employee Trust Company Ltd. - incorporated June 9, 2000;
- Techtronic(2000)Ltd. - incorporated April 6, 2000;
- Rover Financial Services (GB) Ltd. - incorporated April 3, 1997;
- Phoenix Venture Leasing 2 Ltd. - incorporated February 22, 1995;
- Phoenix Venture Leasing Ltd. - incorporated October 11, 1987;
- MG Rover PAW Ltd. - incorporated April 7, 1986;
- MG Rover Dealer Properties Ltd. - incorporated February 14, 1986;
- Rover Cars Ltd. - incorporated May 15, 1984;
- MG Rover Overseas Holding Ltd. - incorporated October 29, 1980;
- Wolseley Motors Ltd. - incorporated June 8, 1979;
- MG Rover Wholesale Ltd. - incorporated March 28, 1946; and,
- Rover Company Ltd. - incorporated June 13, 1896
See MG Rover
Sources and further reading
- "Report on the Affairs of Phoenix Venture Holdings Limited, MG Rover Group Limited and 33 other Companies Volume 1". 2009. Retrieved December 27, 2012.
- "Report on the Affairs of Phoenix Venture Holdings Limited, MG Rover Group Limited and 33 other Companies Volume 2". 2009. Retrieved December 27, 2012.
- "War of words over Rover collapse". BBC News. September 11, 2009. Retrieved May 22, 2010.
- "Autocar Awards 2002:Outstanding achievement: Winner MG Rover: "....For a company that two years ago was losing £800m a year with falling sales, no firm plans for new product and no effective business partners whatever, this has to rate as one of the biggest comebacks in Automotive history. Long may it continue"."". Autocar. 234 (nbr 8 5512): page 51. 20 November 2002.
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