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UPDATE 1-Magna, GM aim to sign Opel deal by July 15 -sources

Published 06/17/2009, 12:38 PM
Updated 06/17/2009, 12:51 PM
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* Companies hope to be far enough to draft sale contract

* Jilted Opel suitors watch for Magna misstep

(Adds details and background)

By Christiaan Hetzner and Angelika Gruber

FRANKFURT, June 17 (Reuters) - General Motors and Magna have set themselves a target to agree by July 15 on the sale of a majority stake in Opel to the Canadian auto parts group and its Russian partner Sberbank, sources close to the talks said.

"There was an agreement that Magna and GM on July 15 should be far enough in their negotiations that they can reach a conclusion that serves as the basis for a contract," one person familiar with the matter told Reuters.

Neither Magna nor GM Europe would comment on the timeplan.

Siegfried Wolf, co-Chief Executive of Magna, had said on June 3 that he expected a "final signing" in four to five weeks, after which it would await the necessary regulatory approvals before an expected closing by the end of September.

Just 48 hours after Wolf's comments, GM Europe President Carl-Peter Forster confirmed the Magna co-CEO's rough timeplan of a "definitive agreement" by July and a closing by September.

During the time that General Motors operates under Chapter 11 bankruptcy protection and until a sale to a new investor is concluded, 65 percent of Opel's shares are formally held by a trust set up to ensure that a 1.5 billion euro ($2.08 billion) bridge loan extended by Germany is not misappropriated.

Rival bidders waiting in the wings such as Fiat and Beijing Automotive Industry Corp (BAIC) are still hoping for a collapse in the talks in order to re-enter negotiations with GM.

GM and Magna have already largely resolved some issues such as the licensing fees Opel will pay for access to GM technology.

Other sticking points -- such as where Opel is allowed to sell cars or who ultimately bears the risk for its 4 billion euros in pensions should Opel file for insolvency -- have yet to be ironed out, however.

(Editing by Michael Shields)

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