Another quarter of losses for Magna as it bids for Opel

Aug 7, 2009, 10:16 GMT

Aurora, Canada/Vienna - Canadian-Austrian car parts supplier Magna International reported a second quarter loss on Friday amid continuing talks to take over German car maker Opel.

With the global car industry under pressure and US vehicle production halved in the April to June period, the company reported a net loss of 205 million dollars, compared with a profit of 227 million dollars in the same quarter last year.

The company's operating loss amounted to 237 million dollars.

Owing to declining car production, Magna's sales in car assembly, auto parts, engineering and other sectors fell by 45 per cent to 3.7 billion dollars.

It was the fourth straight quarter of loss for the company.

'Despite this temporarily difficult situation, Magna is standing on the most solid and strongest financial base in the industry,' chief executive Siegfried Wolf said. 'We have cash reserves of 1.7 billion dollars.'

Together with Sberbank in Russia, Magna is bidding to buy Opel from US automotive group General Motors.

While GM has expressed preference for the rival bidder, Belgian financial investor RHJI, the German government favours Magna's consortium.

GM chief executive Frederick Henderson was due to meet Wolf at GM's Detroit headquarters Friday evening to discuss outstanding issues.

One of the open questions concerns rights to Opel patents.