Magna and Russian bank ready to invest $1.1B in Opel

Magna International Inc. on Friday confirmed it is part of a group that is bidding for General Motors' Opel unit.

The Canadian company said that it has made a non-binding offer for Opel with Russian bank Sberbank Rossii.

Magna and Sberbank are prepared to invest $1.1 billion (€700 million), "a portion of which would be guaranteed by the German government," Magna said in a news release.

Under the offer, Sberbank would own 35 per cent of Opel and Magna 20 per cent. General Motors would hold 35 per cent and Opel employees 10 per cent.

GM and the German government are reviewing offers from three bidders.

Governor likes Magna

The governor of the German state of Hesse, where Opel is based, on Friday endosed the Sberbank/Magna bid.

"I think there is a certain ranking, in which the offer from the Magna group is certainly the one that is closest to the hopes and wishes of, I think, many in German politics but also among employees," Gov. Roland Koch said on German radio.

Magna is "counting very strongly on being able to win new markets and new customers with new ideas, while other concepts rather assume rationalization."

Other bids were made by Italy's Fiat SpA and Ripplewood Holdings LLC of New York. Ripplewood is a buyout company.

Koch said "there is a very interesting offer from a financial investor with the Ripplewood group and certainly some … are a little disappointed that Fiat's offer is a very long way from what one perhaps hoped for in some places."

GM has a June 1 deadline to complete a restructuring and get more U.S. and Canadian government support, or file for bankruptcy. That has become the efective deadline for resolving the future of Opel.

The German government will decide whether to back Opel, and if so, how, but GM will choose among the three bidders.

Opel, based in Ruesselsheim, has about 25,000 employees in Germany.