Sunday, August 30, 2009
GM Europe braced for Insolvency if no firm bid
GM Europe, which owns Vauxhall/Opel, has sought professional insolvency advice to prepare for the possibility that it may not attract a firm buyer in time to rescue the company.
Vauxhall executives believe that if a firm offer for GM Europe is not made within days, the carmaker faces three scenarios, one of them bankruptcy.
Magna International and RHJ Holdings, which are rival bidders for GM Europe, are waiting for GM's board in Detroit to pick one of them and proceed with a sale.
However, it emerged earlier this week that GM Europe's parent company is divided over whether to sell the European business or keep it.
GM Europe executives believe that if neither offer is pursued; Magna and RHJ will alter their offers, extending the negotiating period, the American parent will keep the business, or GM Europe will become insolvent.
Meanwhile, it has also emerged that Fiat may seek to capitalise on the uncertainty surrounding future ownership of GM Europe buy launching a fresh push to buy Vauxhall/Opel. Fiat previously made a bid for GM Europe, but lost out on being on the final bidding shortlist.
Additionally, a future German government may be willing to finance a restructuring of Vauxhall/Opel under the ownership of GM. The government, which has agreed to provide €4.5 billion to fund the brands if a sale to Magna is completed, has all but given up on the deal happening before Germany's general election in four weeks.
DATED: 30.08.09
FEED: AW
