Bloomberg Anywhere Bloomberg Professional About Bloomberg


 
GM Buyback Provision for Opel Is Opposed by German Hesse State

By Andreas Cremer

June 26 (Bloomberg) -- General Motors Corp.’s plan to write a buyback provision into the sale of the carmaker’s Opel division is opposed by the government of Hesse, the German state where the unit has its headquarters.

German authorities have given “a clear response” of opposition, Roland Koch, prime minister of Hesse state, said today in an e-mailed statement. Opel is based in Russelsheim, where 15,550 of its 25,000 Germany-based workers are employed.

Koch, who backs Magna International Inc. as the preferred buyer of Opel, had talks with GM Chief Executive Officer Fritz Henderson in Detroit on June 22. Hesse will seek to get GM to sign a contract with an investor “as quickly as possible,” Koch was quoted as saying in the statement.

Magna, the Aurora, Ontario-based auto-parts maker, is leading the group negotiating to buy the GM unit. GM is engaged in talks with buyout firm RHJ International SA and Beijing Automotive Industry Holding Co. that may lead to the signing of non-binding memoranda of understanding, according to people familiar with the negotiations.

A 1.5 billion-euro ($2.1 billion) loan shouldered by Germany’s federal government and the four states with Opel factories is helping to offset losses of about 100 million euros that Opel incurs every month, Koch said in the statement.

To contact the reporter on this story: Andreas Cremer in Berlin at acremer@bloomberg.net.

Last Updated: June 26, 2009 08:41 EDT

Sponsored links