General Motors is prepared to part with a controlling stake in Opel/Vauxhall for nothing but a pledge to invest directly in a new company formed from its European operations, according to two people familiar with its plans.
GM, which might file for bankruptcy in the US and is running short of cash in Europe, was talking to more than six financial and industrial groups about acquiring a stake in its regional arm, Fritz Henderson, the carmaker's chief executive, said last week. It wants potential buyers to give a firm indication of their interest over the next two to three weeks.
According to a person familiar with GM's thinking, an investor will be asked to pay at least €500m ($652m) in equity but the carmaker will realise no financial gain as the money will be injected directly into Opel.
People close to GM say it is also prepared to unload Saab, its Swedish premium brand that filed for creditor protection in February and recently opened its books to outside investors, for as little as nothing in order to divest the brand.
GM has pledged €3bn in kind to a holding company comprising its European operations, of which Germany's Opel forms the largest part, and wants governments, led by Germany's, to guarantee €3.3bn of loans for it. The company is expected to have its headquarters in Germany.
GM could retain a minority stake but, because it is exploring options including reserving a stake for employees, the carmaker could still remain the company's largest single shareholder.
Germany's government has ruled out a bail-out of Opel but said it would provide loan guarantees for a third-party investor. A deal could take the form of a leveraged buy-out as a possible investor could use a €3.3bn combination of equity and state-guaranteed debt to give the new holding company a financial base.
Commerzbank, GM's advisers, last week sent out an offer document for Opel. Its talks with investor groups are at an early stage and it could be difficult finding an investor, given the perceived risks surrounding GM and the global industry's crisis.
Italy's Fiat and SAIC - GM's main joint venture partner in China - have both denied interest in buying Opel/Vauxhall.
GM's European unit is engaged in "aggressive" contingency planning to ringfence its operations in case the company files for bankruptcy in the US, according to a person familiar with its plans.
Options under consideration at GM are said to include putting financing in place for its international holdings ahead of a bankruptcy filing or seeking debtor in possession financing from the US government for them after a Chapter 11 filing.
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