Washington: General Motors' newly-appointed board has failed to support a plan backed by its executives that would sell the US auto giant's European subsidiary, Opel, to Canadian auto supplier Magna International Inc, according to reports on Saturday.
The meeting had adjourned with no decision, according to a GM statement. A GM spokesman confirmed to a news service that the board was not able to make a decision.
Board chair Edward Whitacre reportedly argued that a separate offer from Brussels-based RHJ International SA should be taken more seriously, sources told the a Journal.
Magna's bid for Opel is backed by the German government, which has offered financial backing to the tune of USD 6.4 billion. Germany on Friday set out tough financial requirements for GM, according to a letter available with a news service, asking for help with dealing with Opel's possible deficit of USD 1.7 billion.
The GM board has not gotten a financing offer from the German government for the RHJ offer. GM was to ask Germany for more information about possible funding for RHJ, a news service reported.
No date has been set for another GM board meeting or a deadline for a GM decision.
The Magna-led bid also includes the Russian state bank Sberbank dand Russian carmaker GAZ.
GM is hiving off a majority stake in its European operations after the US government bailed out the largest US carmaker. The US government, along with the Canadian government, is the majority stakeholder. The United Auto Workers Union also owns a large stake in the company that emerged from bankruptcy court in July.
Opel has operations in four German states. In the letter on Friday, the governments also required that dividends only be paid to shareholders after the loans from German governments are repaid.
IANS
First Published: Saturday, August 22, 2009, 09:21