Bankruptcy Still an Option for Opel, German Official Reveals

Even if Fiat and Magna International are now fighting to take over the German ailing brand Opel, bankruptcy might still remain an option unless the two companies improve their bids, said Economy Minister Karl-Theodor zu Guttenberg. Both Fiat and Magna confirmed their interest in Opel, with a "basic" decision expected to be announced this week as General Motors is facing a deadline of June 1 in the United States to decide whether to file for bankruptcy or continue the restructuring process.

No matter if Fiat or Magna, together with its Russian ally Sberbank, take over Opel, the German government still has to provide support for the German manufacturer. While Magna confirmed in an official statement that it would purchase 20 percent of Opel and leave 10 percent of the company to its employees, Fiat insisted the takeover would not affect Opel's operations in the country, as it intends to include the German manufacturer in its over-discussed alliance with Chrysler.

"We now have three offers for an Opel takeover, but that doesn't mean that one of them will automatically come to fruition," Guttenberg told the Bild am Sonntag publication. "We must first have a high degree of certainty that the significant tax money we will have to provide is not lost. From my point of view, none of the three offers so far provides this certainty in a sufficient way. If these deficits were to remain, an orderly insolvency would clearly be the better solution."

According to drive.com.au, zu Guttenberg revealed that Fiat has already improved the initial offer it submitted for Opel but more adjustments are to be made in case the company really aims to take over the German manufacturer.