UPDATE: GM Europe President Expects Final Opel Deal By July
05 June 2009 - 9:04PM
Dow Jones News
The president of General Motors Corp.'s (GMGMQ) European unit
said Friday he expects a definitive agreement for an acquisition of
the business by Magna International Inc. (MGA) to be reached by
July, with the closing of the deal to be completed by
September.
"But as our partners at Magna have stated as well, while we're
all fully committed to getting this deal done, much work remains
and much could happen along the way," Carl-Peter Forster wrote in
his corporate blog.
"If we succeed, I'm very confident that the new Opel/Vauxhall
will have an excellent base to grow its future business to the
benefit of all involved," he said.
Last week, the German government agreed to provide EUR1.5
billion in bridge financing to keep GM's Adam Opel GmbH unit afloat
and enable it to forge a deal with Magna, despite the bankruptcy
filing of parent GM in the U.S.
The agreement to establish a trusteeship for Opel was reached
after two late-night negotiating sessions between company
executives, the German government, German state governors and the
U.S. Treasury.
Forster said that U.S. representatives were "often on the
receiving end of criticism by certain voices in labor and
politics," particularly after talks almost collapsed May 27 over an
alleged extra cash demand of EUR350 million by GM.
"Let me state clearly that this was a misunderstanding of
expectations that arose late in the process and was in no way a
mistake or manipulation by our finance team," Forster said.
"There was no additional amount of financing that was being
asked for. It was just a simple clarification of the first draw we
needed to take at the beginning of June to meet our cash flow needs
and pay our suppliers," he said, adding that this cash need was
"higher than the government was led to believe by people
advising."
Forster said that it's "the nature of intense negotiations that
they go through at least a couple of near-death experiences before
they rebound. In this case, we had several."
"The trust agreement we established is a German KG company in
charge of holding 65% of the shares in Adam Opel in accordance with
the rules of a trust deed agreed between GM and the German
government," Forster said, adding that the trust company is
controlled by advisers instructed by GM and the German government.
It won't, however, be in control of Opel's daily operations, which
"will continue as usual."
Company Web site: www.opel.com
-By Christoph Rauwald, Dow Jones Newswires; +49 69 29 725 512;
christoph.rauwald@dowjones.com