Opel talks fail on further cash demand; final round set for Friday

28 May 2009

The late night talks in Berlin for the revival of beleaguered Adam Opel GmbH, which is facing bankruptcy, broke down today morning as Opel demanded for an immediate bridge loan of 300 million euros ($415 million) from the German government.

It is also reported by BBC that one of the bidders has pulled out, leaving Fiat and Canada's Magna in the fray.

A decision over Opel has been delayed to Friday, German economics minister Karl-Theodor zu Guttenberg told reporters after late night negotiations in Berlin that dragged on into the early hours of Thursday.

German finance minister Peer Steinbrueck said GM, Opel's parent, presented a new cash demand, adding that the exact purpose for any German state aid has to be transparent.

"This wasn't the case...We can't accept that, because we need security," he said.

Steinbrueck said, however, that there is "reasonable hope" that a decision on bridge financing for Opel could be made on Friday.

Meanwhile, German chancellor Angela Merkel met with key cabinet ministers, governors of the German states with Opel plants, representatives from parent GM and the US Treasury, as well as executives from the bidders for Opel.