The Phoenix consortium yesterday claimed that it had secured financial backing for its bid for the Rover car company. A spokesman for the consortium led by former Rover chief executive John Towers said: "The backing is in place and BMW have been told."
The question of how the consortium would finance its bid has been the main sticking point in its negotiations with BMW, which is determined to dispose of its loss-making Rover subsidiary. BMW exec utives will now have to decide whether the quality of the financial package justifies further negotiations.
The German company has threatened to close Rover unless a buyer can be found by the end of the month. Industry sources said it wanted a clear outline of a deal agreed before its annual meeting on May 16.
The consortium spokesman said that Mr Towers had given full details of the financial package to Stephen Byers, the trade and industry secretary.
Mr Towers, accompanied by other members of the consortium and union officials, pre sented a detailed business plan for Rover to Mr Byers and DTI officials.
The spokesman would not name the financial backers or say how much was involved. However, industry sources said Phoenix hoped to get £500m from BMW to cover redundancy costs and raise £200m from institutions to cover Rover's running costs. The DTI said Mr Towers had not made a formal request for state aid.
The business plan is thought to include the early launch of an estate version of the Rover 75, an executive car made at the company's Cowley plant.
The consortium's preferred option is to acquire Rover's Longbridge and Cowley plants, although it is prepared to consider buying just Longbridge.
The consortium got a shot in the arm yesterday when Rover revealed that it had more than doubled its UK sales last month after it cut prices by up to £2,000 a car. It sold 22,665 vehicles, second only to Ford.
Rover has decided to extend its low-price campaign for another month, although the maximum discount has been reduced to £1,750.
A Rover spokesman said that every ninth car sold in the UK last month was a Rover, lifting the company's market share from 5.72% to 13.48%. The Rover 25, which would have been short-lived under the aborted Alchemy bid for the company, was the country's top selling car, with the Rover 75 in fifth place.
BMW car sales in the UK fell from 5,596 to 3,438, cutting its market share for the month from 3% to 2%. A BMW spokesman rejected any suggestion that the fall could have been a reaction to events at Rover.
