Now, the car manufacturer approached the four states in Germany which host the Opel factories to provide some financial support. Opel will be liquid for remaining months of 2010.
Opel, however, needs to spend a few billion Euros to execute a reorganization that will cut jobs and decrease capacity by about 20%. The funds will also be utilized for the development of new products to make the brand profitable again. Since Germany rejected the request of GM, Opel will search for other sources of loan guarantees.
Opel applied for federal guarantees amounting to about 1.1 billion Euros from the bailout money called the Deuthschlandfonds from the government. The carmaker is seeking help from the 4 German states of North Rhine-Westphalia, Hesse, Rhineland-Palastinate, and Hesse.
The states approached by Opel have confirmed their readiness for the funding. Hesse, for example, can offer around 1.5 billion Euros for a guarantee program this year. Back in 2009, Hesse loaned to Opel 347 million Euros as part of a bridge loan and Opel has repaid this loan with interest.
The top executive of Opel asserts that the German states might be agreeable in extending the loan guarantees from 275 through 550 million Euros which they can use to source funds from the EIB or European Investment Bank.
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