Magna gives more funds in Opel bid
- Source: Shanghai Daily
- [08:12 July 29 2009]
- Comments
Canadian auto parts maker Magna has increased the amount of upfront capital it will inject in its offer for General Motors' European unit Opel, a German government source said yesterday.
"Magna is now offering 350 million euros (US$ 498million) of its own capital immediately," said the government source, who is familiar with talks to find an investor for Opel, adding: "Furthermore, there should be a 150 million euro convertible bond."
Magna originally wanted to invest just 100 million euros of capital in Opel in two tranches of 50 million euros, sources involved in the negotiations said, along with another 400 million euros in convertible debt.
The Canadian group's improved offer comes after the German government criticized the amount of their own capital all three bidders for Opel planned to inject into the car maker.
GM and the German government, which is being asked to provide Opel with loan guarantees, have been considering offers from a consortium of Magna and Russia's Sberbank, from private equity firm RHJ International, and from China's Beijing Automotive.
However, GM's European business said last Thursday it had agreed to continue detailed talks with Magna and RHJ. It did not mention Beijing Auto in a statement.
The German government prefers Magna's bid, while sources involved in the talks say GM favors RHJ's offer.
The endgame of the battle for control of Opel will likely play out in the Opel Trust, which has been responsible for Opel since GM entered bankruptcy in June, if the German government and 35 percent shareholder GM cannot agree on an investor.
