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Wanted: £700m, now

Industry analysts express doubts over the Phoenix consortium's ability to finance its Rover bid.

Talks between BMW and the Phoenix consortium on the future of Rover are progressing only with difficulty. Speaking to the German daily Handelsblatt yesterday, a BMW spokesperson described the financial basis underlying the Phoenix bid for the British carmaker as still the most difficult aspect of the negotiations.

London analysts are sceptical about Phoenix’s prospects to secure sufficient funds before BMW’s dealine expires at the end of May. The consortium is thought to be needing some £700m to keep mass production of Rover cars afloat. According to a report published in yesterday’s Guardian, leading UK banks including Barclays, NatWest, HSBC and Lloyds are unwilling to provide the overdraft facility of £200m that Phoenix is desperate to secure. The consortium is now poised to approach US as well as Canadian sponsors, the Guardian said.

Despite the uncertainty surrounding the financing, Phoenix chief John Towers remained bullish on the possibility of an agreement. Talks with BMW are expected to resume before the end of the week.