Opel requires $1.4bn in bridge loans to survive

MICHIGAN: General Motors Corp���s Opel unit needs at least 1 bn euros ($1.4 bn) in bridge loans to continue operations while it negotiates with two or three potential bidders, the automaker���s top European executive said.

Opel expects at least two and probably three offers by the end of next week, GM Europe President Carl-Peter Forster said in a telephone interview.

The loans, ���between 1 billion euros and 2 billion euros,��� will allow the company to operate during the ���few months��� it will likely take to finalize a deal with potential bidders, he said. The German automaker has said it needs 3.3 billion euros in funding, including state aid, and $1.2 billion in cost cuts to survive apart from parent GM, which faces a potential June 1 US bankruptcy. Without a bridge loan, the unit, based in Ruesselsheim near Frankfurt, will run out of money some time in the third quarter, Forster said.

Likely offers will include one from a group led by Aurora, Ontario-based Magna International Inc. with a focus on Russia, and one from Turin, Italy-based Fiat SpA that has a Latin American emphasis, Forster said. A third party may also bid, he said, declining to be specific. Opel dealers on Friday said they would be willing to create a 500 million-euro fund to buy as much as 20% of the cash- strapped carmaker and its Vauxhall sister brand in the UK.