A group of ex-MG Rover managers are close to finalising a deal to buy the bankrupt carmaker's SV supercar, as part of their effort to revive the famous Austin-Healey badge.
GB Sports, run by Fraser Welford-Winton, former head of Rover's engine business, is understood to be close to agreeing terms to buy the assets of MG Sport and Racing, the Rover division which made the SV, from PwC, the administrator.
People close to the talks said a deal was likely before Christmas. Sport and Racing was put into administration with debts of €64 million and assets of €17 million in April, when Rover collapsed.
Assuming no last-minute problems, the deal will give GB Sports a functioning car on which it can begin to rebuild the Austin-Healey brand, last used in 1968.
The sale will also be a positive sign for delayed attempt by GB Sports and China's Nanjing Automobile to agree a venture to restart carmaking in a corner of Rover's sprawling Birmingham factory, which has been shut since April.
Nanjing paid €78 million for the Longbridge factory and other assets of Rover in July and has been in talks with GB Sports since then about reviving the MG brand.
Nanjing wants to make the TF sports car and ZT saloon in Birmingham, as well as building MGs in China.
GB Sports and Nanjing signed a memorandum of understanding three weeks ago, which set out terms for licensing the Austin-Healey brand from the Chinese.
The licence arrangement is part of a wider joint plan, still under discussion but it is understood it could go ahead separately. The joint venture talks are likely to extend into January,and are currently focused on the timing and cost of future models.
The key to the Sport and Racing progress has been an agreement with Qvale Automotive, a Californian car dealer which sold the rights to its Mangusta model - modified and relaunched as the SV - to Rover in 2001.
Qvale had been blocking the sale of the SV by administrators, claiming rights over the design but it is understood to have agreed to drop its objections in return for a US distribution deal for the car.
It is not clear if Qvale, which introduced the MG brand to the US in 1947, would also sell MGs in the US.
Historically, Austin-Healey was stronger in the US than the UK, and GB Sports, which is financed by a US-led consortium, hopes the brand can be used for premium-priced cars costing €45,000-€75,000. MG would be expected to offer lower-priced cars.