The General Motors board has chosen to sell 55 per cent of its European subsidiary Opel/Vauxhall to Canadian parts manufacturer Magna International and its Russian partner Sberbank by November 30th.
A senior executive from General Motors said it should close a deal with Magna and Sberbank by the November deadline.
“I see no obstacles to getting the deal done successfully by the end of November,” said Mr John Smith, GM’s chief negotiator for the deal.
Mr Smith said GM will continue to cooperate closely with Magna on platforms, powertrains, manufacturing and purchasing.
GM announced Thursday that it plans to sell a majority stake in Opel and its British sister brand Vauxhall to Magna and the Russian state lender Sberbank.
The deal to go with Magna/Sberbank has come after months of wrangling, during which GM actually considered trying to hold onto the European operation, which provides vital research and development work for the company worldwide.
GM apparently gave up on its attempt to keep Opel/Vauxhall during a board meeting earlier this week, which heard an independent report by financial consultants that said it would need at least US$6.1 billion in additional funds to retain the European operation.
Under the proposal, Magna and Sberbank would each own 27.5 per cent of the company, while Opel employees would hold 10 per cent and GM the remaining 35 per cent.
As part of the deal about 10,000 European jobs will be cut, a quarter of those in Germany.
The German government will provide €4.5 billion (US$6.6 billion) in financing to carry the German-based carmaker through a restructuring period in addition to the €1.5 billion (US$2.2 billion) it loaned Opel in May, Mr Smith said. Other European governments with significant Opel operations will cover some of that amount, he said.
Magna and Sberbank will provide another US$500 million equity investment, Smith said.
Mr Smith said Magna aimed to make Opel profitable by 2011 and the carmaker should be able to repay the government loans used to back the deal by 2014 and begin paying dividends by 2015.
With AutoNews EU