GM formally withdraws all Opel-related loan requests, vows to finance alone

Zach Bowman — Wed, 16 Jun 2010 13:01:00 EST

Filed under: Europe, Government/Legal, GM, Earnings/Financials, Opel, Vauxhall, UK

General Motors has just announced that it will no longer pursue government aid for its Opel and Vauxhall brands. The reason? Neither company's financial situation has exactly changed since The General first began asking for loans from the EU a few months back, but GM simply says it can't wait for certain governments to get their ducks in a row. Evidently, the application process has been much more drawn out than the company originally anticipated.

We're guessing that by "certain governments," General Motors actually means Germany. The country just voted against handing out any money to either Opel or Vauxhall because General Motors seems to be doing well enough to support its children. Whether true or not, GM says it will continue to pursue other financing options to help support the two European brands.

GM originally asked European governments for a total of $2.2 billion at current conversion rates, and to date, only the UK and Spain have responded around $405 million in aid each. Hop the jump for the full press release.

[Source: General Motors]

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German government approves majority sale of Opel to Magna, Russians

Sam Abuelsamid — Sun, 31 May 2009 11:44:00 EST

Filed under: GM, Opel, Russia

With General Motors expected to file for chapter 11 bankruptcy protection in New York on Monday morning, negotiators in Germany scrambled to finalize a deal to save Opel from insolvency. Following a six-hour meeting in the German Chancellor's office in Berlin on Friday evening, a deal was finally announced by finance minister Peer Steinbrueck. Although an overall deal to transfer control of Opel from General Motors was reached, details are still being worked out and a final contract won't be signed for several more weeks.

Under the deal announced early Saturday morning, GM will retain a 35-percent stake in Opel, which would allow the automaker to continue sharing technology with the German brand. Russia's government-controlled Sberbank is providing most of the financing for the deal and also gets a 35-percent share. Canadian auto parts maker and contract assembler Magna International will own 20 percent and the remaining 10 percent will go to Opel employees.

The German government will also provide a $2.1 billion bridge loan to Opel to help it keep operating during the transition phase. A key to the deal was German government demands that Opel assets be protected from GM creditors during a US bankruptcy proceeding. Opel will apparently be placed into some sort of trust in order to keep it whole and preserve its value for the new majority owners. President Barack Obama agreed to the deal with German Chancellor Angela Merkel during a late-night phone call.

It's not known at this point how GM's UK operations at Vauxhalll figure in to all of this and whether any of it will be preserved, consolidated into Opel, or sold off separately.

[Source: Reuters]

German government approves majority sale of Opel to Magna, Russians originally appeared on Autoblog on Sun, 31 May 2009 11:44:00 EST. Please see our terms for use of feeds.

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