GM may mortgage China assets to keep Opel

Shanghai, August 25 (Gasgoo.com) General Motors Co is considering a plan to retain its Opel and Vauxhall operations in Europe and may mortgage its assets in China to raise money, Reuters reports Tuesday, citing sources with knowledge of the deliberations.

The development follows a meeting last Friday in which GM directors declined to endorse a sale of Opel to Magna, sending the automaker back into negotiations this week with the German government.

Sources said while GM remains focused now on trying to clear remaining issues with the Magna deal, executives also are considering other options, including raising more than $4 billion in a bid to keep Opel.

Because GM is barred from using funding from the U.S. government to support its international operations, it may have to raise money by selling or mortgaging its assets in China, according to the sources.

The German government had promised to help finance that Opel's sale to Magna but GM earlier leaned toward a bid for Opel/Vauxhall from RHJ International SA, a Belgian private-equity group.

The change in plans by GM presents a potentially difficult diplomatic situation for the Obama administration as Germany and Russia, both key trading partners of the US, want the Magna deal to go through.

>>Reuters