Phoenix Venture Holdings

BMW had acquired the Rover Group in 1994, but by 1999 it had become a major financial liability due to disappointing sales of some of its model ranges. In January 2000, it was reported that UK sales had fallen from more than 190,000 in 1998 to 143,000 in 1999 - a fall of more than 25% in sales for the company, despite overall new car sales increasing by 7%. Even Rover's newest model, the Rover 75 (launched in the spring of 1999), had failed to meet sales expectations.^[4]

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 16 March 2000, Alchemy was widely expected to take control of at least some of the Rover Group, which BMW was prepared to sell. By that time, it was already decided that BMW would retain Mini (with the launch of an all-new Mini only a year away) and sell Land Rover to Ford. These were widely seen as the two most viable parts of the Rover Group.

Alchemy intended to name the company the MG Car Company, producing the MG F roadster and possibly developing additional, limited production sports cars. The Rover brand would have been dropped and all volume production of family cars abandoned, despite these cars making up the bulk of Rover sales - with more than 100,000 being sold in Britain alone during 1999. A large percentage of the workforce at Longbridge would also have been made redundant.

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 6 April 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 8 May, following a last-minute injection of finance from the First Union Bank of North Carolina, a deal with Phoenix was agreed. The sale was completed the next day.

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, 45 and 75 models, reengineer and redesign the MG F, and eventually replace the entire model range with new cars developed through joint venture with another carmaker. The MG-badged versions of the Rover models were launched in the summer of 2001, and were reasonably popular. A 1.1 litre engine had already been added to the Rover 25 range, to give it a competitor at every level with most rival superminis. The MG F was updated shortly afterwards to become the MG TF, and a number of concept cars were shown to the public, hinting at all-new models which MG Rover was hoping to launch in the near future.

The consortium continued to enjoy strong UK press support for several years following the Phoenix coup, despite no all-new models being launched by the company. By 2003, MG Rover was the ninth best selling carmaker in Britain, whereas the Rover Group (which had still included Land Rover and Mini) had been the third biggest seller just five years earlier. It still had a 3.72% share of the new car market, accounting for more than 95,000 sales.^[5]

By the beginning of 2005, however, sales figures of MG Rover cars were declining sharply, not helped by the fact that most rival companies had launched all-new competitors in the previous five years. During 2004, the media had regularly reported that the company's sales were in decline.^[6]

The Rover 25 and 45, for instance, were updated versions of designs which had first been launched in 1995, and all of their major rivals had been replaced once - and in some cases twice - since then.^[7]

• Studley Castle
• Powertrain Ltd

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 22 March 2005;
• MG Rover Powertrain Ltd. - incorporated 24 September 2003;
• MG Rover Lease Plan Ltd. - incorporated 23 January 2002;
• MG Rover OUV Ltd. - incorporated 23 January 2002;
• MG Rover Group Trustees Ltd. - incorporated 30 April 2001;
• MG Rover Group Senior Trustees Ltd. - incorporated 25 April 2001;
• MG Rover Group Contract Trustees Ltd. - incorporated 24 April 2001;
• MG Rover Executive Trust Company Ltd. - incorporated 5 October 2000;
• MG Rover Heritage Ltd. - incorporated 5 October 2000;
• MG Rover Property Holding Ltd. - incorporated 5 October 2000;
• MG Rover Dealer Trust Company Ltd. - incorporated 9 June 2000;
• MG Rover Employee Trust Company Ltd. - incorporated 9 June 2000;
• Techtronic (2000) Ltd. - incorporated 6 April 2000;
• Rover Financial Services (GB) Ltd. - incorporated 3 April 1997;
• Phoenix Venture Leasing 2 Ltd. - incorporated 22 February 1995;
• Phoenix Venture Leasing Ltd. - incorporated 11 October 1987;
• MG Rover PAW Ltd. - incorporated 7 April 1986;
• MG Rover Dealer Properties Ltd. - incorporated 14 February 1986;
• Rover Cars Ltd. - incorporated 15 May 1984;
• MG Rover Overseas Holding Ltd. - incorporated 29 October 1980;
• Wolseley Motors Ltd. - incorporated 8 June 1979;
• MG Rover Wholesale Ltd. - incorporated 28 March 1946; and,
• Rover Company Ltd. - incorporated 13 June 1896

• Austin Rover unofficial site: Like a Phoenix from the flames