Bailout Watch 501: Dire Straits: Money for Nothing and Opel for Free
Got $652m in loose cash sitting around? Boy, does GM have a deal for you! If you are willing to invest that money into Opel/Vauxhall, then The General “is prepared to part with a controlling stake in Opel/Vauxhall for nothing,” Financial Times reports. It gets better . . .
GM has pledged €3 billion “in kind” to a holding company comprising its European operations, of which Germany’s Opel forms the largest part. GM wants governments, led by Germany, to guarantee €3.3bn of loans for the holding company. GM could retain a minority stake, but wouldn’t scoff at remaining the unit’s largest single shareholder either.
According to FT, 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.
In the meantime, GM’s European unit is engaged in “aggressive” contingency planning to ringfence its operations in case its parent files for bankruptcy in the US. According to FT, options under consideration at GM include putting financing in place for its international holdings ahead of a bankruptcy filing, or seeking debtor in possession financing from the U.S. government after a Chapter 11 filing.
GM’s advisor Commerzbank sent out an offer document for Opel/Vauxhall and GM, and expects a quick answer. GM wants potential buyers to give a firm indication of their interest over the next two to three weeks.
So if you have $652m (or possibly a bit less) to invest, you may up with a big European car company.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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I can see Opel as one of the brands that will disappear in the near future. Who wants to buy a medium priced, very dull, low quality car? If you just want a no thrills, cheap transport device, you will be more satisfied with a Korean or Japanese car.
This is so sad - the once the iconic symbol of American business and manufacturing might stooping to shopping it's assets for whatever it can get. "No offer refused". Here in the UK it'd be like Tesco at a car-boot sale (for those that don't know, Tesco dominates the supermarket trade here, about 1 in every 12 or 10 pounds spent goes through them). Opel (and Vauxhall) are respected brands in Europe. No earth-shattering technologies or break-throughs, but good, solid and reliable cars for the ordinary person. What comes next - various GM brands on eBay?
superbadd75 said it all 'does GM really know WTF they’re doing, or are they just doing stuff until something actually works? The GM saga is the craziest damn thing I think I’ve ever seem.' I completely agree. i can't recall anything quite so strange, even including the 2000 presidential election. GM has gone from master of the universe to getting rid of assets in a pathetic and pitiable way. Not of course that I feel sufficiently sorry for them to buy one of their pathetic and pitiable vehicles.
A deal for Opel is only good if GM and Vauxhall go away for good and take their corporate culture with them.