GM will not be allowed to include a buy-back clause
21 July 2009

Germany's economics minister has ruled out allowing GM to include a buy-back clause in its sale of Vauxhall/Opel, seemingly undermining one of the three bidders' chances of success.

"This is incompatible with our views and cannot happen," German economics minister Karl-Theodor zu Guttenberg told German Sunday paper Frankfurter Allgemeine Sonntagszeitung.

Belgian financial investor RHJ International has prepared its bid on the basis that it would run Vauxhall/Opel in the short-term, before selling it on. GM was said to be in favour of working with RHJ, in the hope it could buy back Vauxhall/Opel in an improved financial climate.

However, the German government has a say in who can buy Vauxhall/Opel as it will take on the bulk of the loan guarantees required as part of a deal. The state and federal governments are represented on the board of a trust that has to approve a sale of Opel.

zu Guttenberg added that bidders for Opel will have to invest their own capital for the package of state aid to obtain EU clearance, as he is not willing to leave all teh risk to tax payers. "That's too simple. What good is an offer that is cheap (to the taxpayers) if the return of the money is in question. The key will be if a concept is so sustainable that there is a high probability that the interest, fees and the money can be paid back," he said.

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