GM Generali

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Germany hasn't reached a decision yet on providing state-backed bridge financing to General Motors Corp.'s (GM) Adam Opel GmbH to give the unit more time to clinch a deal with a new investor because the U.S. parent company has come up with new cash demand, German government officials said early Thursday.

A decision over Opel has been delayed to Friday, Economics Minister Karl-Theodor zu Guttenberg told reporters after late night negotiations in Berlin that dragged on into the early hours of Thursday.

Finance Minister Peer Steinbrueck said GM presented a new cash demand of EUR300 million, which the federal government is unwilling to meet. He also said Austrian-Canadian Magna International Inc. (MGA) and Italian auto maker Fiat SpA (F.MI) are still in the race for Opel, while inventor Ripplewood isn't anymore.

Chancellor Angela Merkel met with key cabinet ministers, governors of the German states with Opel plants, representatives from parent GM and the U.S. Treasury, as well as executives from the three bidders for Opel.

The meeting was also overshadowed by a rift between the ruling coalition parties, with the Social Democrats appearing to be ready to bail out Opel at any cost to safeguard jobs. Zu Guttenberg, however, early Thursday insisted that an orderly insolvency remains an option as a final resort.

The German government has been under pressure to make a decision as it sought to avoid Opel getting embroiled in GM's looming insolvency proceedings in the U.S. and risking large-scale job losses at a time when Europe's largest economy is gearing up for federal elections in September.

Company Web site: www.opel.com

-By Christoph Rauwald and Andrea Thomas, Dow Jones Newswires; +49 30 2888 4126; christoph.rauwald@dowjones.com; andrea.thomas@dowjones.com