UK government offers GM Europe £270 million loan guarantee
In an about turn, the UK government has today revealed it will provide GM Europe with a £270 million loan guarantee in order to secure the company's operations in the UK. The move has come as something of a surprise after various similar proposals by other companies were turned down by the UK government at the height of the recent economic turmoil.
The government has validated this move as a way to ensure the Vauxhall offshoot is successful and the thousands of jobs in the UK, dependent upon the company, are secured. However, those with long memories will see similarities with the MG Rover situation where a significant government guaranteed loan was given to an automotive company just weeks before an election. While nobody is suggesting this is in any way an identical situation the timing of the move is a little unnerving to say the least.
GM Europe was on the verge of being sold to Canadian outfit Magna last year when General Motors turned around and withdrew the company from the marketplace. Since then negotiations have been ongoing around Europe with General Motors determined to extract as much assistance for its offshoot as possible. The UK government has finally step forward with a large loan guarantee but the timing of the move has raised some concerns.
Share this..
Related stories
Goldman Sachs Swoops Like A Vulture
While all around them companies are under serious pressure it seems that major US financial institution Goldman Sachs can do no wrong. The group has just reported profits which far exceeded the downbeat forecasts of analysts and the stock has responded with a near 10% rise over the last week, much of it in anticipation of good results. So how is Goldman Sachs swimming against the tide?
Where has all the rescue package money gone?
Only a matter of weeks ago the UK government ploughed literally billions and billions of pounds into the financial sector, taking direct stakes in banking companies and increasing liquidity. On the proviso that consumers would benefit in some shape or form the release of this money was widely applauded at the time but many are asking exactly where has it gone?
So far the banks have...
Is Stuart Rose about to be forced out of Marks & Spencer?
Amid signs that institutional investors are not happy with Sir Stuart Rose taking on the role of executive chairman and chief executive, there are signs this evening that at least three dominant parties will demand that the roles be split. The fact that amalgamating these two prominent positions in any one company goes against the very basics of UK governance guidelines appears to have been overlo...
Read MoreWhere will funding come from for the mergers and acquisitions sector?
Today's renewed speculation regarding a potential takeover of Sainsbury's has highlighted the fact that while there is interest in some areas of the UK economy and specific businesses, where will the liquidity come from to fund these deals?
An upsurge in takeover and merger activity is unlikely to go unnoticed by UK banks who will take this as a positive sign that both domestic and...
Insider dealer jailed for eight months
A former general counsel to telecoms company TTP Communications was today jailed for three months in connection with a long-running insider dealing investigation. This is a story we covered a few days ago whereby the solicitor allegedly passed on confidential information regarding TTP Complications to his father-in-law. His father-in-law then acquired shares in the business crystallising a substan...
Read More