GM, Magna reach tentative deal on Opel: sources

Fri May 29, 2009 10:36am EDT
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FRANKFURT (Reuters) - General Motors and Canadian auto parts group Magna International have reached an agreement in principle that could rescue ailing German carmaker Opel, sources close to the negotiations said on Friday.

The two sides have been trying to agree on a memorandum of understanding that would serve as the basis for bridge financing of 1.5 billion euros ($2.10 billion) as well as a trustee solution that would protect Opel from creditors in case parent GM files for Chapter 11 in U.S. bankruptcy court.

"A framework agreement has been reached. The goal is to work out as many of the details as possible before the meeting with (Chancellor Angela) Merkel in order to sign a memorandum of understanding today," one source with knowledge of the talks told Reuters.

(Reporting by Christiaan Hetzner, Angelika Gruber and Philipp Halstrick)

<p>New Opel cars are pictured at the Opel plant in Bochum May 29, 2009. REUTERS/Ina Fassbender</p>