GM repays €200 million Opel loan to Germany
14 Nov 2009
General Motors yesterday repaid €200 million ($297.6 million) to the German government given by the state earlier this year to keep its European brand Opel afloat and said that it would pay back the remaining €400 million ($595 million) by 30 November.
The German government had provided Opel a €1.5 billion ($2.2 billion) bridge loan to run the operations of the car maker's European operations until a deal was finalised to sell the company to a consortium led by Canada's Magna International and Russia's Sberbank.
German Chancellor Angela Merkel agreed to make available €1.5 billion to Opel following GM's bankruptcy filing in June since she did not want the company to shut down as Opel's four German plants employs 25,000 Germans out of Opel's 50,000 workers employed in Europe.
Last month, GM even signed a preliminary deal to sell a majority stake in Opel, a deal, which had the backing of the German government with € 3 billion in state loan guarantees, to the consortium led by Magna.
But late last month, GM did a U-turn and decided not to sell Opel after Spain, the UK and Belgium raised objections to the German aid amidst fears that Magna would shift jobs to Germany as a condition for the aid provided by Merkel. (See: Spain, Britain refuse aid to German-backed Opel sale to Magna)
The EU competition commissioner Neelie Kroes has also stepped in and asked whether Germany has offered an aid-for-jobs offer to Magna.
