Report: GM considers raising $4 billion to keep Opel

Posted: Aug 24, 2009
Filed under: GM, Industry News, Opel

Many officials in Germany were very angry with General Motors Company today for not picking a winning bidder for its Opel brand this past Friday. Sources familiar with the situation said that Fritz Henderson and other management had asked for more information from the German government on state financing available to complete the sale to Magna.

Reuters is now reporting that GM is considering a plan to raise funds to keep Opel as an alternative to selling the brand to Magna International Inc. Sources said that executives are considering an option that could raise more than $4 billion in a bid to keep Opel.

GM had no immediate comment.

Since GM is banned from using funding from the United States government to support international operations, insiders say that the company could raise money by selling or mortgaging the automaker’s assets in China.

- By: Omar Rana

Source: Reuters

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  • Pat
    For some reason I knew this was coming....There is some hardcore fishy business going on here
  • zermatt
    I agree. The reason GM was going to sell Opel was two fold:

    1) They needed to reduce debt and off loading Opel was going to put that debt onto the new owners.

    2) GM couldn't raise private capital to get the US operations out of trouble, let alone the European operations. Also, the amount of aid offered by European governments was not up to what GM said it needed to continue operations.

    If GM can raise $4 billion to acquire Opel, it should apply that $4 billion to buy back ownership from the US government. Getting out from under government ownership should be the highest priority that GM should have.
  • GMfan87
    i agree that should be their highest priority...however profitability needs to come first. paying the govt back does no good if it puts them in the hole again
  • GMfan87
    hmm opel would be a good asset to keep...but is it worth it...
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