MG Rover has raised £100 million (E150 million at current exchange rates) by selling its parts business to Cat Logistics Services.
The money will help the UK-based automaker develop a new lower-medium model to replace the Rover 45.
Cat Logistics Services, part of the US construction group Caterpillar, already manages MG Rover's distribution and sales of parts. Phoenix Venture Holdings, MG Rover's parent, retains the option to buy the business back after four to five years. It also retains a share of the revenue.
It appears that Phoenix is mortgaging its parts business to pay for the crucial new lower-medium model and hopes to buy back the business later.
MG Rover plans to produce the Rover 45 replacement with Chinese automaker, Shanghai Automotive Industry Corp.
It is likely that SAIC will produce a sedan and minivan version of the car in China and that MG Rover will make a hatchback version for Europe.
