GM looking for $1.42 bn aid for Opel: Report

GM looking for $1.42 bn aid for Opel: Report

Frankfurt: US automaker General Motors believes it can obtain €1billion ($1.42 billion) in aid from Britain, Poland and Spain to restructure its European unit Opel, a press report said on Thursday.

GM was also prepared to put more than €1 billion of its own money to keep Opel from being sold to Canadian parts maker Magna and Russian partners, the Wall Street Journal quoted a source close to the matter as saying.

Magna is the preferred buyer of German officials who have already granted Opel €1.5 billionin credits and are prepared to provide several billion more to protect 25,000 Opel jobs in the country.

That is about half the number of European workers who make cars for Opel and its sister brand Vauxhall in Britain.

GM would rather sell a stake in Opel to the Belgian private-equity firm RHJ International, or keep Opel and have it file for insolvency, the report said.

Berlin opposes a sale to RHJ because it believes more German jobs would be at risk, so raising funds from other European capitals would strengthen GM’s hand in talks with German officials.

GM is worried that a sale of Opel to Magna, backed by the Russian bank Sberbank and automaker GAZ, would fuel competition for GM’s own cars in the growing Russian market.

Although most of its factories are in Germany, Opel also has big plants in Belgium, Britain, Poland and Spain.