MG Rover Holdings has reached agreement with the BMW Group to settle the Completion Accounts dispute in connection with the sale of Rover Cars.

When the contract was signed last year by the BMW Group and the Phoenix Consortium, the operating activities of Rover Cars were transferred with immediate effect on 9 May 2000. The transfer balance sheet was prepared after this date. The subsequent differences of opinion as to the valuation of individual balance sheet items were referred to an independent expert for determination. This process is now no longer required.

As part of this agreement, announced today, the BMW “Powertrain” plant in Longbridge will be transferred to MG Rover Holdings ownership. This means that MG Rover will now be able to produce engines and transmissions for itself and third party customers.

After the purchase of the Powertrain business, around 1300 employees will be transferred with this business.

The agreement reached today (21-May-2001) also involves a payment of £65 million to the MG Rover Group.

Formal completion of this agreement is planned to occur at the end of this month.

Kevin Howe, Chief Executive of MG Rover Group said:

“We are delighted that all outstanding issues relating to the completion accounts have now been agreed with BMW. Furthermore our ownership of Powertrain Limited enables us to take full control of our engine development and production programmes and delivers yet another of our key strategic milestones”.