GM threatens to sell majority stake in Opel: report

Cash-strapped US auto major General Motors may offload a majority stake in Opel, its main European division, to private investors amidst choked credit market and the threat of bankruptcy, its new chief executive has said.

Fritz HendersonGeneral Motors, which is seeking €3.3 billion of loans or guarantees from European governments, including about €2.5 billion from Germany, is reported to have now mandated Commerzbank to help find a new investor for its Opel unit, amidst booming demand for its cars.

While government funds are yet to come, Commerzbank has identified some parties interested in acquiring a stake in Opel, a Financial Times report quoted Fritz Henderson, chief executive of General Motors, as saying. (See: GM's new chief optimistic on steering the company to health)

Henderson declined to identifying the party, but said the sale could make GM a minority stakeholder in Opel.

He said the company expects some 120,000 orders in the first quarter of 2009, but warned it could run out of cash next month and may not be able to sustain its operations on the continent under the present tight money conditions.

The order boost comes from a package the German state offers as part of its fight against slumping world auto sales. The government is paying owners 2,500 euros ($3,351) to scrap old cars if they replace them with a new model.