US/GERMANY: GM delays Opel decision to next week

26 October 2009 | Source: just-auto.com editorial team

General Motors' management board will discuss the sale of 55% of Opel and Vauxhall to a consortium led by Magna International at its next regular meeting on 3 November, GM's chief negotiator John Smith has said.

The news came amid speculation that GM might decide not to sell the troubled unit at all but would restructure it although this was seen as unlikely since the six-month long negotiations were advanced and Opel's cash position was precarious.

Next week's meeting will discuss a letter from German economy minister Karl-Theodor zu Guttenberg who has asked GM to confirm that the automaker chose Magna for business, not political reasons. Guttenberg also said that the offer of EUR4.5bn (US$6.7bn) in aid does not depend on GM agreeing to sell to Magna.

Guttenberg's letter was in response to concerns raised by European Union officials who pointed out that attaching any conditions to state aid would contravene EU competition rules.

Many observers had expected the Magna deal to be completed last week, or at the very latest by today.

"Given the significance of the Opel transaction, GM's board will soon meet in its regularly monthly meeting to consider minister zu Guttenberg's letter and changes to the Magna/Sberbank proposal that have occurred since its last review on 9 September," Smith said in a blog posted by GM.

There was no comment from Magna.