Phoenix Venture Holdings
Encyclopedia
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 Rover 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 called 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:
, 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
. 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:
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
company formed by four businessmen (John Towers, Peter Beale, Nick Stephenson and John Edwards). Following BMW
BMW
Bayerische Motoren Werke AG is a German automobile, motorcycle and engine manufacturing company founded in 1916. It also owns and produces the Mini marque, and is the parent company of Rolls-Royce Motor Cars. BMW produces motorcycles under BMW Motorrad and Husqvarna brands...
's break-up of the Rover Group
Rover Group
The Rover Group plc was the name given in 1986 to the British state-owned vehicle manufacturer previously known as British Leyland or BL. Owned by British Aerospace from 1988 to 1994, when it was sold to BMW, the Group was broken up in 2000 with the Rover and MG marques being acquired by the MG...
a financially complex deal involving a £500 million "dowry payment" from BMW, resulted in PVH purchasing Rover 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
Administration (insolvency)
As a legal concept, administration is a procedure under the insolvency laws of a number of common law jurisdictions. It functions as a rescue mechanism for insolvent entities and allows them to carry on running their business. The process – an alternative to liquidation – is often known as going...
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 called 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 AutomobileNanjing Automobile GroupNanjing Automobile is a state-owned enterprise with a history that dates from 1947, making it the oldest of the Chinese automobile manufacturers, although the comparatively younger First Automobile Works was the first to actually make cars.The group's products have included cars, trucks, and...
- Powertrain LtdPowertrain LtdPowertrain Ltd was a British company based in Birmingham which designed, manufactured and marketed car engines and transmissions. It was a subsidiary of Phoenix Venture Holdings and a sister company to MG Rover...
. - administered by PriceWaterhouseCoopers, assets sold to Nanjing AutomobileNanjing Automobile GroupNanjing Automobile is a state-owned enterprise with a history that dates from 1947, making it the oldest of the Chinese automobile manufacturers, although the comparatively younger First Automobile Works was the first to actually make cars.The group's products have included cars, trucks, and... - MG Sport and Racing Ltd. - administered by PriceWaterhouseCoopers
Background
BMW had acquired the Rover Group (purely for the Mini brand) in 1994, but by 1999 it had become a major financial liability. Since September 1999 the venture capital company Alchemy PartnersAlchemy Partners
Alchemy Partners is a British private equity firm, which specialises in leveraged management buyouts, management buy-ins and the provision of later stage development capital.Alchemy was founded in 1997 by Martin Bolland and Jon Moulton...
, run by Jon Moulton
Jon Moulton
Jon Moulton is a British venture capitalist. He is the founder and managing partner of the private equity firm Better Capital, and is the former managing partner of the private equity firm Alchemy Partners...
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
Mini
The Mini is a small car that was made by the British Motor Corporation and its successors from 1959 until 2000. The original is considered a British icon of the 1960s, and its space-saving front-wheel-drive layout influenced a generation of car-makers...
and sell Land Rover
Land Rover
Land Rover is a British car manufacturer with its headquarters in Gaydon, Warwickshire, United Kingdom which specialises in four-wheel-drive vehicles. It is owned by the Indian company Tata Motors, forming part of their Jaguar Land Rover group...
. Alchemy intended to name the company the MG Car Company, selling the MG F
MG F
The MG F and later the MG TF are mid-engined, rear wheel drive roadster cars produced from 1995 onwards. The MG F was the first all-new car to bear the MG marque since the MG MGB, produced from 1962 to 1980...
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
Carl Chinn
Professor Carl Stephen Alfred Chinn MBE, Ph.D. is an English historian, writer, radio presenter, magazine editor, newspaper columnist, media personality, local celebrity, and famous Brummie, whose working life has been devoted to the study and popularisation of the city of Birmingham in England...
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
Kevin Howe
Kevin Howe is a retired American soccer defender who played professionally in the North American Soccer League.Howe, along with his brother Tom, graduated from Christian Brothers College High School in St. Louis, Missouri. He then attended Southern Illinois University-Edwardsville where he played...
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.
Other assets
Included in the sale were:- Studley CastleStudley CastleStudley Castle is a 19th century country house at Studley , Warwickshire which is now occupied as a hotel. It is a Grade II* listed building.The manor of Studley was owned by the Lyttleton family and was bequeathed by Philip Lyttleton to his niece Dorothy, who married Francis Holyoake...
in WarwickshireWarwickshireWarwickshire is a landlocked non-metropolitan county in the West Midlands region of England. The county town is Warwick, although the largest town is Nuneaton. The county is famous for being the birthplace of William Shakespeare...
, a conference hotel - the Midland Powertrain engine plant, costing an additional £20
- Rover Capital (now MG Rover Capital), a book of car loans, costing an additional £50 along with an undisclosed sum from the Bank of ScotlandBank of ScotlandThe Bank of Scotland plc is a commercial and clearing bank based in Edinburgh, Scotland. With a history dating to the 17th century, it is the second oldest surviving bank in what is now the United Kingdom, and is the only commercial institution created by the Parliament of Scotland to...
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