Berlin 'still open' to other Opel bidders

AFP - [email protected] • 3 Jun, 2009 Updated Wed 3 Jun 2009 18:33 CEST
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The German government said Wednesday it was "still open" to other bidders for Opel while Canada's Magna and General Motors haggled over finalising their preliminary agreement.

"The process is still open to all candidates," government spokesman Ulrich Wilhelm told a regular press briefing, four days after Berlin agreed to support auto parts maker Magna's bid with loan guarantees and an emergency credit line.

Magna, backed by Russian state-owned lender Sberbank, won German backing in the early hours of Saturday after Italy's Fiat backed out of a rival bid and Germany excluded Brussels-based RHJ International from the process.

China's Beijing Automotive Industry Corporation (BAIC) also expressed interest, but it missed a German government deadline for formal letters of intent to be filed. Press reports said that BAIC executives met with German officials in Berlin on Tuesday.

The German seal of approval came after Magna and GM hammered out a preliminary deal that will see the Detroit-based auto giant - which filed for bankruptcy on Monday - give up a majority stake in its European operations.

Magna co-chief executive Siegfried Wolf said on Wednesday at Opel headquarters that he expected to sign off on a deal in four to five weeks, with the consortium's Opel entry to be completed by September.

Opel, which employs around 25,000 people in Germany, has been given a special-purpose status to protect it from GM's bankruptcy and Berlin is providing a €1.5-billion ($2.1-billion) loan.

The Finance Ministry said €300 million had already been transferred. Magna's consortium plans an initial investment of around €700 million. Under the deal, GM would keep 35 percent of the company and Opel's workers would retain 10 percent. Magna would hold 20 percent, Sberbank 35 percent.

Meanwhile on Wednesday, Volkswagen said that Magna would face conflicts of interest following the planned takeover of Opel.

Volkswagen, with its core VW, Audi, Skoda, Seat, Bugatti and Lamborghini brands is a major customer for Magna. Magna also supplies components to Porsche, Volkswagen's largest shareholder.

Magna chairman Frank Stronach had said Tuesday that he expects Opel to be profitable again in four years and plans to export cars to Canada from end-2009 onwards. However, there are currently no plans to export Opel cars to the US.



AFP 2009/06/03 18:33

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