Insurers braced to pay out for Rover

THE insurance industry is bracing itself for a wave of claims from key suppliers to MG Rover as hundreds of firms are resigned to getting back next to nothing from the failed Longbridge carmaker.

Dozens of representatives of businesses that have lost hundreds of millions of pounds in the collapse of MG Rover were gathering at a Birmingham hotel today, expecting to be told by administrators that few or no assets are likely to be available from which to pay them.

It seems increasingly likely that many of MG Rover's suppliers will revert to their insurers to claim back their losses.

One automotive industry insider said: 'Most of the key suppliers will have taken out some form of indemnity or credit insurance. When doing business with MG Rover, they will have been very aware of the risks and many will have taken appropriate action.'

MG Rover's administrators will tell the companies - most of which are from the West Midlands - that claims against the car manufacturer total £1.4bn with identifiable assets in the business of just £85m. The administrators will not yet quantify how much creditors might get, but the figures suggest it may be as little as 1p in the pound.

A spokesman for Stadco, which made bodyshells for MG Rover, said: 'We believe it is a lost cause.'

Owed more than £2m by MG Rover, Stadco shut its Coventry plant and is laying off 430 workers. Quoted carparts supplier Wagon has lost £14m a year in business and MG Rover's closure has cost it an immediate £2.4m.