Magna Working to Seal Opel Deal

There is a framework that should allow Opel to avoid a possible insolvency filing.

Canadian autoparts maker Magna said on June 1 it would press ahead with plans to hammer out a deal to take over German car maker Opel, while warning there was no guarantee of a final accord.

"Following extensive negotiations over the past several days with various stakeholders ... it has reached a conceptual framework that should allow Opel to avoid a possible insolvency filing," Magna said.

The deal would also allow Opel "to pursue the restructuring required for its immediate and long-term viability."

The German government said on May 30 it had concluded a deal with Magna and its Russian backers after marathon talks in Berlin as it sought to save the jobs of some 25,000 workers employed by Opel.

But Magna warned Monday: "There is no assurance that any transaction will result from Magna's current involvement."

Magna chairman Frank Stronach said: "While the recent negotiations have been intense and difficult at times, I believe we have achieved a constructive solution that represents a "win-win" for all stakeholders and will position Opel to compete and succeed."

He added the company would continue to work with General Motors as well as the federal and regional German governments as it sought "to turn our concept into a reality in the next phase of the process, as the parties work toward definitive agreements."

Copyright Agence France-Presse, 2009

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