Germany could provide 4.5 billion euros (US$6.35 billion) in state aid for carmaker Opel if General Motors chooses Canada’s Magna, Berlin’s favored suitor, as the buyer, a minister said.
The last-ditch offer would see the federal government and German states with Opel plants split the initial aid bill without waiting for other European countries that have GM sites to chip in, German Deputy Economy Minister Jochen Homann said.
“We could envisage making a loan available, then later agreeing precisely how the costs are to be shared out with the other European countries,” Homann — who heads the government’s Opel task force — said on Wednesday.
Others such as the UK, Spain, Poland and Belgium could contribute once the degree of their further involvement in GM’s European operations, which employs some 50,000 in Europe, became clear.
Asked whether the offer to stump up the money would be extended to the Canadian automotive group Magna’s rival bidder, Belgian financial group RHJ, Homann said: “The question doesn’t arise, because the German government has a preference for Magna’s improved offer.”
General Motors’ board of directors is scheduled to convene today and sources close to the deal said the meeting would address the sale of Opel.
“It’s possible that the GM board will review both offers on Friday and will give a recommendation,” Homann said. “The German government has clearly stated that it favors the Magna offer. There are no doubts from this perspective.”
Homann said the federal government and the states expected Opel’s suitor to invest 10 percent of the sum in Opel that Germany would make available for the carmaker.
“That means Magna would have to bring in 450 million euros of its own capital,” he said.
Asked whether he was confident that this could be agreed, Homann said: “Yes.”
RHJ said on Wednesday it had about 380 million euros available to invest at the end of last month, a sum that had dipped 12.5 percent since the end of March.
Sources close to the talks said the GM board aimed to recommend one of the suitors at the meeting.
Trustees who oversee a majority stake in Opel — which was ringfenced and propped up with German aid in May to avoid being swept into GM’s brief bankruptcy — must approve any decision.
GM declined to comment.
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