Germany could provide €4.5 billion ($6.35 billion) in state aid for carmaker Opel if General Motors chooses Canada's Magna, Berlin's favoured suitor, as the buyer, a minister said.
The last-ditch offer would see the federal government and Germany states with Opel plants split the initial aid bill without waiting for other European countries that have GM sites to chip in, 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,” Mr Homann - who heads the government's Opel task force - told Reuters last night.
Others such as Britain, 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, Mr Homann said: “The question doesn't arise, because the German government has a preference for Magna's improved offer.”
General Motors' board of directors convenes on Friday 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,” Mr Homann said.
“The German government has clearly stated that it favours the Magna offer. There are no doubts from this perspective.”
Mr 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 of its own capital,” he said.
Asked whether he was confident that this could be agreed, Mr Homann said: “Yes.”
RHJ said yesterday it had about €380 million ($535.9 million) available to invest at the end of July, a sum that had dipped 12.5 per cent since end-March.
Sources close to the talks said the GM board aimed to recommend one of the suitors at the meeting.
Reuters