Cash-strapped car manufacturer MG Rover Group -- the last major British-owned automaker -- is going into financial administration, a form of bankruptcy protection, after a proposed takeover deal with a Chinese firm fell through, the British government said Thursday night.
The troubles at MG Rover -- an industry stalwart that employs more than 6,000 Britons -- come at a sensitive time for the government, with a general election just four weeks away.
Earlier Thursday, Rover suspended production at its British factory and called on the government to firm up its offer of a $188 million bridging loan to keep the company solvent and assist the proposed deal with Shanghai Automotive Industrial Co.
MG Rover executives and British government officials have been 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.