GM to Raise Money Internally
General Motors has now agreed to internally fund its restructuring process. The Company was earlier looking to raise €1.8bn (£1.5bn) in loan guarantees for its Opel/Vauxhall subsidiary. But its move to withdraw these requests has surprised everyone.
The German Government had also rejected a proposal to provide €1.2bn in aid to help GM restructure and invest in its European operations. There was earlier a willingness shown by German states to help the Company but the Company refused to accept these offers.
The move was confirmed by Nick Reilly, Head of GM's European business. He was also not very happy with the response of the German Government.
GM still needs to invest significant amount of money in its European operations and admitted that the process to generate funding has proved very tiresome and longer than anticipated.
Nick admitted that GM has now decided to raise this amount through internal sources. He admitted that GM's better than expected performance has ensured that it can internally account for this amount.
The US Government has a stake of 61% in the Company while the Canadian Government owns 12% in the auto maker.
The UK Government is still willing to provide €330m in loan guarantees to GM to save the jobs in Vauxhall/Opel plants which are currently operating in the country.
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