BMW sells Rover to British Consortium

LONDON, MAY 10. For the symbolic sum of $10, BMW of Germany sold its money-losing Rover subsidiary today to a British consortium that wants to maintain the troubled British automaker as a mass producer of cars and guarantor of thousands of British jobs.

The purchase price, equivalent to little more than $15, was offset by a heftier promise of a $767 million loan from BMW to enable the buyer, the Phoenix Consortium, to take over the company - currently losing $3 million a day. German newspapers have labelled Rover "the English Patient" because of its losses and low productivity.

The deal, struck with surprising speed after the collapse 11 days ago of negotiations between BMW and a British venture capital firm, Alchemy Partners, seemed at least for now to avert the threatened closing of Rover's Longbridge plant near Birmingham in the British Midlands. The plant employs about 9,000 people, half of Rover's work force, and provides supply jobs for more than 20,000 others. BMW had said it would shut down the plant if no buyer were found by the end of this month. The terms of the sale today showed how desperate BMW was to cut its losses. But analysts said the consortium faced an enormous challenge if it is to succeed where BMW failed after a six-year, multibillion-dollar investment.

- AP

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