Don't miss

Replay


LATEST SHOWS

EYE ON AFRICA

International Francophone Games kick off in Abidjan

Read more

THE INTERVIEW

Iran open to dialogue with Saudis, says top diplomat

Read more

MEDIAWATCH

Spicer bows out of White House

Read more

FOCUS

Iraq's Mosul: Rebuilding a city fractured by sectarian mistrust

Read more

FRANCE IN FOCUS

Bistrot or bust? Why France's famed cafés are disappearing

Read more

REPORTERS

Video: Afghans live in fear as kidnappings soar

Read more

EYE ON AFRICA

Kenya court rules Dubai firm can print presidential ballots

Read more

ENCORE!

Omar El Akkad's 'American War': A tale of US dystopia

Read more

BUSINESS DAILY

Exxon sues US over $2m fine for violating Russia sanctions

Read more

Business

GM could sell Opel stake without a profit

Latest update : 2009-04-20

According to the Financial Times, US car giant General Motors is prepared to drop its controlling stake in its European subsidiary Opel and reinvest the proceeds in Opel's operations, in exchange for loan guarantees to ensure the unit's viability.

AFP - US auto giant General Motors is ready to drop its controlling stake in its European unit Opel in exchange for a public guarantee for its activities in Europe, the Financial Times reported Monday.

The FT said GM was in talks with more than six financial and industrial groups about selling a stake in Opel and would like an indication of their interest within three weeks.

The report cited two people familiar with GM's plans.

It said GM, which is facing potential bankruptcy in the United States and is running short of cash in Europe, did not expect to make a profit on the sale but rather would invest the proceeds -- at least 500 million euros (652 million dollars) -- in Opel's operations.

In exchange, GM is seeking a pledge from several European states, led by Germany, for 3.3 billion euros in loan guarantees for the new subsidiary to insure its viability.

The new unit would likely have its headquarters in Germany and GM could retain a minority stake.

Germany has ruled out a bailout of Opel but said it would provide loan guarantees for a third-party investor.

The FT said Opel, which stated last week it has enough liquidity to stay afloat on its own for now, was trying to put up a firewall around its operations in case GM files for bankruptcy in the United States.

Like other automakers in Germany, Opel has weathered the economic crisis with the help of a German government programme designed to boost demand for cars by offering a bonus for people trading in their old cars and buying newer, more environmentally friendly models.

Date created : 2009-04-20

COMMENT(S)