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Vauxhall/Opel talks break down
28 May 2009
Negotiations over the sale of Vauxhall and Opel broke down last night after parent company GM made a last-minute request for an emergency loan of 300 million euros (£260m).
GM, which faces a 1 June deadline to restructure itself or file for bankruptcy, had been in talks with the German government, when it made the unexpected cash request.
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“This was a bizarre night” Karl-Theodor zu Guttenberg, Germany's economy minister, told the Bloomberg news agency after eight hours of talks in Berlin. "The talks were turned upside down by GM’s unexpected demands. We do not have the assurances we need in order to extend a bridge loan.”
Peer Steinbrueck, Germany's finance minister added: "We had a nasty surprise when this demand turned up literally at 8pm. "We did consider this a bit of an outrage."
Reports suggest that Belgium's RHJ has now withdrawn from the bidding process, while Beijing Automotive Industry Corporation (BAIC)'s late bid is not being considered. As a result two preferred bidders for Vauxhall remain - Fiat and Magna International.
Talks are set to resume today, and German government officials are still optimistic of the sale being completed by Friday.
Magna, which insiders say is the German government's preferred bidder, said on Thursday night it may loan GM the 300m euros as long as it has an assurance from the German government it will recover the money in the event GM goes bust.
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