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Opel sale contract may come this week

Source: Reuters - Mon 12th Oct 2009

General Motors is on track to sign a contract this week to sell a majority stake in European carmaking arm Opel to a Canadian-Russian consortium, Opel labour leader Klaus Franz told Reuters.

Opel workers have to agree cost concessions for the sale of a 55 percent stake to Canadian automotive group Magna and its Russian partner Sberbank to proceed.

"We are on the home stretch but there a few more points to clear up" Franz said on Monday, adding talks about the situation in Britain had made good progress. "I expect the contract to be signed in the course of this week."

The negotiating parties have said they aim to close the deal by the end of November.

Labour has said the 50,000 Opel staff - half of them in Germany - could contribute annual savings of 265 million euros (247 million pounds) in return for a 10 percent stake in Opel.

Other European countries with Opel plants including Britain, Spain and Belgium have expressed concern about the deal, which envisions cutting around 10,500 jobs and seeks 4.5 billion euros in state aid, most of it coming from Germany.

A German government committee has given its blessings to a 4.5 billion-euro state loan guarantee to back the deal, German magazine Der Spiegel reported.

Magna and Sberbank have vowed to inject 500 million euros into Opel, which they want to use to make an aggressive push into the Russian market.

They have committed to keeping German plants running. Opel's Antwerp plant in Belgium and the British site of sister brand Vauxhall in Luton are seen to be most at risk.

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