Magna submits new proposals for GM's Opel, Guttenberg says

Magna International Inc has submitted “new proposals” to help rescue General Motors Corp’s Opel unit, German Economy Minister Karl-Theodor zu Guttenberg said. Rival bidder Fiat SpA fell in Milan trading.

It’s “unclear” whether an agreement with Magna, the Canadian car-parts maker, can be reached on Friday, Guttenberg told reporters in Berlin today. A meeting at the German Chancellery to decide on Opel’s future will resume at 6 pm, two hours later than scheduled, a government official said. The gathering won’t include GM or Magna executives as talks between the companies continue, the official said.

Fiat Chief Executive Officer Sergio Marchionne said in a statement earlier on Friday that he was “perplexed” by Opel’s financing needs and that he would skip today’s Berlin meeting scheduled to decide on a ¤1.5 billion ($2.1 billion) short- term government loan for the Ruesselsheim, Germany-based carmaker. Chancellor Angela Merkel told Der Spiegel magazine that Germany still aims to avoid forcing Opel into insolvency as its Detroit-based parent prepares a June 1 bankruptcy filing.

“I’m pretty certain that Magna and GM will agree,” Hendrik Hering, the economy minister of Rhineland-Palatinate, said in an interview on Friday. His is one of the four states where Opel has assembly plants that participated in Opel talks hosted by Merkel earlier this week.

Fiat fell as much as 42.5 cents, or 5.4 per cent, to ¤7.41and traded at ¤7.54 as of 4.33 pm, giving the Turin, Italy-based carmaker a market value of ¤9.1 billion.

GM wants an upfront payment of ¤450 million from Germany to keep Opel in operations, about ¤350 million more than the German government had thought, GM CEO Fritz Henderson said in an interview on Thursday.

German officials want bidders to submit letters of intent for Opel, Thomas Steg, a government spokesman, said at a news conference on Friday.

Negotiations involving the German government, the US Treasury, GM and the bidders may resume only if the companies “have something substantial to present,” Steg said.

Financing Opel on an interim basis would lead to “unnecessary risks,” Marchionne said in a statement on Friday. Describing negotiations as “complicated” and “uneven,” he reiterated interest in buying Opel.