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UPDATE 1-German govt to mull Opel bridge financing-sources

Published 05/13/2009, 02:11 PM
Updated 05/13/2009, 02:16 PM
STLAM
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* To discuss needs of Opel at Thursday meeting-source

* Mulling possibilities until Opel partner found-source

* Temporary nationalisation not under discussion

(Combines stories, adds detail, quotes, background)

BERLIN, May 13 (Reuters) - German government ministers will on Thursday discuss possible bridge financing for carmaker Opel until a partner for General Motors' unit is found, government sources said on Wednesday.

"It is about what possibilities there are for bridge financing, should the need arise, until we have an agreement between General Motors and an investor," said one source familiar with the matter.

Another source said that the government was preparing for a possible bankruptcy filing from GM. The U.S. government has imposed a deadline of June 1 on GM to restructure or file for bankruptcy.

German Economy Minister Karl-Theodor zu Guttenberg said last weekend that in the event of a GM bankruptcy, Opel assets could be handed to a trustee who would ensure the interests of creditors. At the same time, a consortium of banks could provide Opel with bridge financing.

A senior German official has also told Reuters that the government could also provide bridge financing for Opel.

In an interview in the Frankfurter Allgemeine newspaper, Carl-Peter Forster, head of GM Europe, said Opel might need cash soon to tide it over until it found a partner.

"If it comes to the trustee solution which the German Economy Ministry has suggested, it would be tied to a credit line. The sum would have to be more than 1 billion euros," he was quoted as saying on the paper's Internet edition.

GM is looking for a partner for its European business and is also seeking 3.3 billion euros in European state aid for it.

Italian carmaker Fiat wants a three-way merger with Chrysler and GM's European operations. Austrian-Canadian car parts maker Magna is also interested in pursuing Opel, most likely together with Russian investors.

Financial sources told Reuters that private equity firm Ripplewood's European arm RHJ had considered a possible bid for Opel but after exploratory discussions both sides concluded there was little chance of success.

A German government spokesman said no decisions would be made at Thursday's meeting, expected to include Chancellor Angela Merkel's chief of staff, Guttenberg, Finance Minister Peer Steinbreuck and Deputy Chancellor Frank-Walter Steinmeier.

"Tomorrow there will just be an exchange of information, there will be no decision. A temporary nationalisation of Opel is not under discussion," said the government spokesman.

The Rheinische Post had reported the government would discuss a temporary nationalisation of the German carmaker.

German politicians, with an eye on September's election, want to find a quick solution for Opel which employs about 25,000 people in Germany.

German and Italian unions met in Frankfurt to try to avoid job cuts in the event of a merger of Fiat and Opel.

"We want to be involved as equal partners from the very beginning to work out any industrial and financial plans," Opel works council leader Klaus Franz told a news conference.

Enzo Masini, an official with Italy's FIOM-CGIL union who participated in the meeting, said Italian and German union leaders had agreed to adopt a common position rejecting the idea of closing any plants in Europe.

"No plant must close," he told Reuters by phone after the meeting. "We are ready to take coordinated action," he added.

A meeting with Austrian unions, where Magna has its European headquarters, is scheduled for next week. (Reporting by Andreas Moeser and Christiaan Hetzner; writing by Madeline Chambers; editing by Jon Loades-Carter)

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