Berlin - German public banks have agreed with the German government to extend temporary financing to General Motors' European unit Opel during efforts to shift it to new ownership, Berlin sources said Tuesday. The agreement on a "model" comes one day before Berlin's deadline for new investors to offer substantive details of plans to take over the company, maker of Opel and Vauxhall cars, when the US parent files for insolvency.
Fiat of Italy and a Canadian automotive parts company Magna are preparing rival bids that are expected to require massive infusions of government money to clear Opel's debts and pension liabilities.
The sources said the banks offering bridging finance comprised the federal bank KfW, the landesbank units run by Germany's regions, economic-development banks run by states with Opel factories and Commerzbank, the retail bank now one-quarter owned by Berlin.
The sources said the agreement assumed a new investor would take over Opel and that Opel's assets were placed in trust.
Washington has been hostile to the trust proposal, with US officials objecting that it would weaken the US parent and would disadvantage creditors of GM who have a claim on such assets.
