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Business

Germany wants more cash from Opel bidders

Text by NEWS WIRES

Latest update : 2009-07-19

Germany's economy minister has said that the three bidders for GM's European unit Opel should rely less on government loans and be ready to take on increased risk by putting up more of their own money.

AFP - The three bidders for GM's European unit Opel have to stump up more cash of their own and rely less on government loans and guarantees, Germany's economy minister said on Sunday.
  
"There are still lots of question marks: for example the bidders have to ensure that the new Opel company can start with a strong capital base," Karl-Theodor zu Guttenberg told the Frankfurter Allgemeine Sonntagszeitung.
  
"That means that the bidders have to be ready to take on more risk themselves. Otherwise the EU Commission will not accept the rescue," the minister told the paper in an interview.
  
Merely requiring less in the form of state loan guarantees is not enough, however, zu Guttenberg said, saying he would rather offer 10 billion euros (14 billion dollars) in safe guarantees than one billion euros for a riskier offer.
  
Berlin agreed in late May to support with cheap loans and loan guarantees a bid for a majority stake in Opel by Canadian auto parts maker Magna, which teamed up with state-owned Russian bank Sberbank and automaker GAZ.
  
But the deal is far from done and dusted, with GM, which emerged from bankruptcy earlier this month, also receiving interest from Brussels-based RHJ and from China's Beijing Automotive Industry Company (BAIC).
  
GM's European division said on Friday that its parent had requested final offers for Opel and and British unit Vauxhall be submitted by the close of business on Monday.

Date created : 2009-07-19

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