Payouts after MG Rover collapse

More than 1,000 companies that are still owed money from the £1.3 billion collapse of MG Rover three years ago are to finally get some cash back.

But it will only come to around 5p for every £1 they are owed. Around 1,250 creditors are set to share in the payout of more than £40 million. Liquidators at accountants PricewaterhouseCoopers (PWC) are set to make the long-awaited payments this summer after turning most of the remaining MG Rover assets into cash, it has been revealed today.

PWC is currently appealing to creditor companies to get in touch so they can share in the payout.

The last major British-owned carmaker went into administration in April 2005 with the loss of 6,400 jobs.

The company and its engine-making arm, Powertrain, were sold that summer to Chinese car firm Nanjing Automobile Corporation in a £53 million deal.

Money was also raised by the sale of thousands of already completed MG Rover cars.

PWC says it will take another two years to fully wind up the Longbridge car giant, at which time a final dividend will be paid, but in the meantime an interim payment of around 5p in the pound is being made by July.

It is the first payout to UK creditors since the company went bust.

It will add around £17 million to the MG Rover pension fund, left with a £495 million black hole by the company collapse. It will also pay out to other unsecured creditors including component makers in the Black Country who supplied MG Rover and were left with unpaid bills.

Many firms had to sack workers and even closed down factories in the wake of the Rover collapse.

In the Black Country around 80 firms were owed a total of £2.3 million.