Magna and Sberbank await decision on Opel
Talks on the sale of Opel stalled after General Motors demanded additional money. GM's last-minute price hike came after the sole American bidder withdrew, leaving the contest to Fiat and the Magna-Sberbank alliance.
A new management might already have been at the wheel, if Opel’s near-bankrupt owner, General Motors, had not bumped the price up by another $415 million.
Peer Steinbrueck, the German Finance Minister called Detroit’s midnight bombshell “a nasty surprise.”
“I can only confirm that it was surprising that GM came with more significant cash needs which kept us busy during the night. It is all together about 300 million euro, which need to be covered very quickly, and that has extended this night very significantly. Further request were made to the two investors which are still being considered.”
With insolvency looming for Opel, the German government had already offered a $2 billion bridge loan. With GM’s last-minute demand, Magna’s CEO promised to find the extra cash so long as the German government guarantees to repay it in case Opel goes bust.
As a car parts maker, Magna is independent and debt free. It aims to build a state of the art car manufacturer according to CEO Frank Stronach.
“We are hoping that we can interact with the U.S. Government and say ‘let us build a role model, the way a car company should be. Built and structured that we would be competitive n a global basis.’ Because if we don’t do that, in 2 or 3 years, they will all be back for the same money because they are all not competitive.”
Analysts say Berlin would favour a Magna-Sberbank bid in order to strengthen ties with Russia. However Magna also promises to save more jobs, and add production, at a plant in Central Russia, and BKS Bank Analyst, Sevastyan Kozitsin think they are sure to win the bid
“I think everything has been decided already. It’s clear that Magna will be the buyer. Of course, surprises are possible, but 300 million euro is not such a big sum to pay for Opel’s capacity. So I think the decision will be made by the weekend.”
Still some experts say the ambitions of Magna-Sberbank – along with car maker Gaz – may exceed their combined abilities. But the threat is bankruptcy. The US government says it will break up GM unless it raises crucial cash by next Monday.