MG-Rover talks 'still on'

Major Chinese car maker Shanghai Automotive Industry Group (Corp) is still in takeover talks with Britain’s MG Rover Group, a senior official at China’s national planning agency said today.

“The firms’ talks are still ongoing,” Chen Bin, deputy director of the Industry Department of the National Development and Reform Commission, told Dow Jones Newswires in Beijing.

“The government has yet to kick off the review procedure (on the deal),” Chen said.

The actual status of the hush-hush dealings between the car companies was unclear.

SAIC officials contacted by phone today refused to comment on the announcement by the British government that the cash-strapped British car maker was going into financial administration, a form of bankruptcy protection, after talks with MG Rover fell through.

Staff at SAIC’s headquarters in Shanghai said the spokeswoman responsible for speaking with the media was “out of town”.

MG Rover executives and British government officials were in China holding emergency talks with SAIC. Reports had suggested that the deal, announced in November by MG Rover, was close to collapsing because of Chinese concerns about the British manufacturer’s perilous financial situation.

SAIC’s acquisition of MG Rover would require approval from the Shanghai city government, SAIC’s controlling shareholder, and the National Development and Reform Commission, a cabinet-level agency in charge of economic policy.