Liquidators of MG Rover supplier boost creditors’ returns above £40m

1,700 unsecured creditors, including former employees of defunct Birmingham manufacturer Powertrain, will share £5.2m in the latest payout.

Liquidators PwC said the latest payout, of 4.74p in the pound, brings the total return to Powertrain’s unsecured creditors to 39.74p.

£43.7m has now been returned over four dividend payment. The latest return is being shared by 1,700 unsecured creditors, including 1,200 former employees of the company.

The company, which had a major facility at Longbridge in Birmingham, went into administration in 2005 as a result of the collapse of MG Rover.

Powertrain was backed by MG Rover and Phoenix Ventures. It was famed for its K-Series engines, which it sold to MG Rover, Land Rover and several other international companies.

Before it went into administration in 2005, Powertrain was also hit by a major outbreak of respiratory disease with around 101 people affected according to the Health and Safety Executive. The HSE said it was down to the inhalation of dangerous bacteria from metalworking and washing fluids.

6,000 employees lost their jobs when Midlands-based MG Rover Group went into administration in 2005. PwC partners were appointed as administrators, with the process converting to liquidation a year later.

In December 2018 the liquidators of parent company MG Rover Group Limited distributed a dividend of £50.9m to unsecured creditors. PwC said it had been a 10 year process, working closely with the liquidators of the firm in Germany to recover the funds from an overseas group company.

Matthew Hammond

“We have now returned almost 40p in the pound to Powertrain creditors, which is a great result at this stage of a liquidation process for former employees and suppliers, and is pleasing compared to initial estimates.

“The collapse of the MG Rover Group impacted many families and communities. Our teams working on this case have brought to life one of our key purposes of solving important problems – in this case the size and complexity of the MG Rover Group and enabling a significant return to creditors.”

PwC said that it would continue to pursue further claims across the group which could lead to further recoveries for unsecured creditors.