Creditors of the bankrupt car firm MG Rover may struggle to get 1% of the £1.4bn they are owed, it emerged today.
MG Rover's administrators, PwC, sent letters this week to more than 8,000 creditors, including staff laid off after the carmaker filed for bankruptcy at the beginning of April.
Creditor claims total £1.4bn compared to assets worth £80.5m after sales to preferred creditors, PwC said in the letters.
Recoveries may struggle to reach between one and two pence in the pound, a source told the Reuters news agency. "The numbers are going to be very, very small," he said.
MG Rover creditors include a pension fund, as well as suppliers, employee benefits, the government and BMW, which sold MG Rover to Phoenix Venture Holdings, a company set up by four Midlands businessmen, for a nominal £10, four years ago.
PwC has sent details of its initial analysis to creditors but said it has made no calculations at all on the likely level of claims or returns. It will provide a fuller update to creditors at a meeting in Birmingham on June 10.
The team of administrators from PwC was called in after MG Rover collapsed, causing more than 5,000 jobs to be lost at Longbridge in Birmingham and leaving thousands more supply-based jobs in jeopardy.
The single biggest creditor of Rover is Phoenix, which is owed £469m. Phoenix has pledged to donate its assets, including any pay-out from administrators, to a trust for former employees.
The second biggest creditor is the Rover pension fund - owed an estimated £325m - while trade creditors are owed £102m and dealers £48m.
Today's claims figure emerged a day after a watchdog involved in a review of Rover's accounts said its investigation had raised "a number of questions".
The Financial Reporting Council did not detail its findings, but said it had passed its report to the Department of Trade and Industry for further consideration.
John Towers, one of the four businessmen who bought MG Rover, has denied any accounting irregularities and called talk of a black hole in Rover's accounts "ridiculous".
