German solar energy company SolarWorld AG said Wednesday it plans to offer euro1 billion in cash and credit for some assets of carmaker Adam Opel GmbH, the German subsidiary of financially strapped General Motors Corp. GM said it wasn't selling.
Bonn-based SolarWorld said in a statement it was planning to offer GM euro250 million ($350 million) in cash and another euro750 million ($945 million) in credit lines in a bid for four German production facilities and Opel's Ruesselsheim development center and headquarters, to make it Europe's first true "green" auto company.
SolarWorld said any deal would be dependent on GM completely exiting the company, and that it would seek a swap compensation payment from GM for euro40,000 ($50,400) per German employee in the transaction, or about euro1 billion.
GM Europe spokeswoman Karin Kirchner said that "Opel is not for sale" and declined further comment, saying GM "wouldn't comment on speculation."
SolarWorld, which makes electricity generating solar panels, is much smaller than GM by revenue. In the third quarter, SolarWorld earned euro36.1 million ($45.6 million) on sales of euro238.3 million ($301 million). GM lost $2.5 billion on revenue of $37.9 billion.
Parent company GM is seeking government loans and says it is running out of cash.
GM officials met with German government officials Monday to discuss a euro1 billion ($1.3 billion) loan guarantee for Opel. Chancellor Angela Merkel said her government would decide on the matter by the end of the year, depending on how the situation unfolds.
SolarWorld said it would develop a new generation of energy efficient and reduced-emissions automobiles alongside successful models that Opel currently produces.
"With the restructuring of the product pallet, the traditional German auto builder would offer in future especially electric and hybrid automobiles and the newest technology combining extended-range electric and combustion motors highly efficiently," SolarWorld said.
Tim Urquhart, an auto analyst with IHS Global Insight in London said he thought it was "highly ambitious and remarkable," and probably "difficult to pull off in the current environment."
"With a company with no track record in their history, it's unlikely," he said.
Urquhart said it would take "multiple billions" of euros for SolarWorld to enter the automotive sector. Other companies that have tried to do so in the past have "fallen badly on their backsides," he said.
SolarWorld shares dropped 19.1 percent to close at 13.20 ($16.63) in Frankfurt.
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