Solarworld Offers to Buy General Motors' German Sites

By Nicholas Comfort and Chris Reiter

Nov. 19 (Bloomberg) -- Solarworld AG, Germany's third- largest solar company, plans to offer to buy German sites belonging to General Motors Corp.'s Opel division and build environmentally-friendly cars.

The solar company can offer Opel 250 million euros ($315 million) in cash and credit lines amounting to 750 million euros, pending ``complete separation'' from the parent company, Bonn-based Solarworld said today in a statement.

Opel has asked the German government for ``somewhat more than'' 1 billion euros in credit guarantees, to help offset what GM has called the worst auto market since 1945. Solarworld wants to make the German company the first European ``green'' automaker by building more efficient, cars with lower emissions such as hybrid and electricity-powered vehicles.

The offer is subject to the success of federal guarantees for the carmaker's loans, as well GM paying Solarworld compensation of 40,000 euros per employee in Germany, the company said. That amounts to 1 billion euros, according to the statement.

``The scope of possible options widens if there's a bankruptcy in the U.S., but at the moment I think strategically this is something that GM wouldn't contemplate right now,'' Nigel Griffiths, London-based director of research firm IHS Global Insight. ``It's basically giving the company away for nothing.''

Not Viable

The proposed sale would leave GM stuck with factories in Spain and the U.K. that may no longer be viable, he said. ``It would lead to an enormous amount of disruption,'' Griffiths said.

Opel spokesman Joerg Schrott declined to comment when contacted by Bloomberg via e-mail. Milan Nitzschke, a spokesman for Solarworld, wasn't immediately available for comment.

Solarworld stock extended declines in Frankfurt trading on news of the plan.

The company, which makes panels mounted on roofs or in fields to yield power from sunlight, traded down 2.46 euros, or 15 percent, at 13.86 euros as of 1:13 p.m. local time, valuing Solarworld at 1.59 billion euros.

To contact the reporters on this story: Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.netChris Reiter in Berlin at creiter2@bloomberg.net.