Magna Appears Frontrunner For Opel As Decision Looms Next Week
22 Mai 2009 - 7:46PM
Dow Jones News
German politicians said Friday that no decision has been made
yet on the three bids for General Motors Corp.'s (GM) troubled Opel
brand, but Austria-Canadian auto supplier Magna International Inc.
(MGA) appears to be frontrunner despite the state of North Rhine
Westphalia's objections.
"All options are still under consideration ... I very much call
for keeping all three [bids] in the talks," zu Guttenberg told Dow
Jones Newswires on the sidelines of an event in Berlin, noting that
insolvency was also still an option.
Separately, zu Guttenberg described Magna's bid for Opel as
"interesting," but added that some financial details still require
clarification as the German state is expected to support the deal
with taxpayers' money.
"It is the case that Magna has presented an interesting concept,
but also [one] that has drawn up questions. These are all questions
that are relevant to taxpayers," he said.
The federal government and the states of Hesse, North
Rhine-Westphalia, Thuringia and Rhineland Palatinate, which are
home to Opel plants, are considering bridge financing to keep opel
operating if GM files for insolvency before it can be sold.
The financing, which will only be given if the government and
the states regard at least one of the bids as sustainable, aims to
give Opel more time for negotiations with the potential investors.
The bridge, or interim, financing of around EUR1.5 billion would be
from state-owned bank KfW and Landesbanken of the states with Opel
plants.
Apart from Magna, Italian automaker Fiat SpA (F.MI) has launched
a bid for Opel as part of a wider push to forge a global auto
alliance comprising its own auto unit as well as Chrysler LLC.
RHJ International (RHJI.BT), a European buyout firm of investor
U.S. Ripplewood with holdings in the auto-parts industry, is also
in the race.
The governor of North-Rhine Westphalia, Juergen Ruettgers, said
he won't support Magna's bid as 2,200 from a total of about 10,000
job cuts would be axed at Opel's Bochum plan, which is located in
his state. He admitted, however, that Magna's bid is "the most
detailed one."
The governors of the German states of Thuringia, Rhineland
Palatinate and Hesse earlier voiced support for Magna's bid.
German Vice Chancellor Frank-Walter Steinmeier echoed remarks by
Economy Minister zu Guttenberg, saying that no final decision has
been made. He said, however, that during a meeting at the German
chancellery earlier Friday it has been agreed that clarifying some
details regarding Magna's bid has priority.
German politicians are planning to continue to discuss the bids
for Opel at a meeting on Monday, he said.
"It is safe to say that whichever concept we might want to
pursue, a substantial number of jobs in Europe is at risk," zu
Guttenberg said. Regarding a timeframe for a decision, zu
Guttenberg said: "We must have made a principle decision next week
because in the U.S. they will make a decision regarding starting
insolvency procedures" for Opel's parent, GM.
-By Andrea Thomas and Christoph Rauwald, Dow Jones Newswires;
+49 69 29 725 512; christoph.rauwald@dowjones.com