Berlin to pick favoured Opel suitor next week
Published on: 20 May 2009 17:51 CET
"We do not have too much time," Olaf Scholz, Labour Minister, told a press conference just before the expiration of a deadline imposed by the German government for offers for a stake.
Earlier on Wednesday, a spokesman for GM Europe told AFP there were a mimimum of three parties filing an offer.
He stopped short of naming names but Italy's Fiat and Canadian auto parts maker Magna have confirmed an interest, while US investment fund Ripplewood is also reportedly throwing its hat into the ring.
The final decision on Germany's Opel, as well as other units of GM Europe including Britain's Vauxhall and Sweden's Saab, lies with GM itself and with the US government, but Berlin will sweeten any deal with loan guarantees.
GM is relying on more than $15 billion (€11 billion) in emergency government loans and faces a June 1 deadline to complete major restructuring or follow fellow US car maker Chrysler into bankruptcy.
GM's chief executive Fritz Henderson said last week that a bankruptcy filing is the "more probable" outcome "given the objectives that we've set for ourselves."
The most prominent bidder for Opel is Italy's Fiat, which wants to combine GM's European, Latin American and South African operations with Chrysler to create the world's second largest carmaker behind Japan's Toyota.
Fiat earlier negotiated a 20-percent stake in bankrupt Chrysler in exchange for its production technology and can increase that to a controlling 51-percent share in the US auto maker as long as Chrysler repays state aid.
Canadian car parts maker Magna has also expressed an interest, teaming up with Russian state-owned lender Sberbank and with Russian carmaker GAZ, owned by tycoon Oleg Deripaska.
"This evening the deadline expires and these expressions of interest will be quickly evaluated by the government, but they will also be assessed in parallel by GM and the US government," German government spokesman Ulrich Wilhelm told a regular briefing.
"Afterwards, in light of this assessment we will engage in further talks and negotiations. A government delegation is also ready... to travel to the US."
Bidders making a formal offer will be expected to come up with around €650 million ($886 million), the Financial Times (FT) reported on Wednesday, and GM will give preference to cash bids.
This could be a blow to Fiat, with a spokesman telling AFP on Tuesday that the firm intended to offer assets instead of cash, in a similar model to its recent deal securing a stake in Chrysler.
"We are in crisis but we still have a value," Klaus Franz, the head of Opel's powerful works council, told the FT. "Such remarks are bursting with arrogance and disrespect for the employees at Opel."
Italy's Economic Development Minister Claudio Scajola said on Italian television on Wednesday however that Fiat had a "good chance" of getting control of Opel.
"It is difficult to say who has the best cards," BHF-Bank analyst Aleksi Wunraw told AFP.
The fate of Opel, an industrial icon dating back to the 19th century and which directly employs around 25,000 people in Germany, has become a hot-button political issue with barely four months to go until general elections.
Chancellor Angela Merkel, up for a second term in the September 27 vote, is
prepared to pull out all the stops to save Opel from collapse but being seen as writing a blank cheque on behalf of taxpayers could hurt her re-election hopes.
The German government is also drawing up emergency plans involving a special trustee and so-called bridge financing of some €1.5 billion to keep Opel going in the event of a GM bankruptcy.