Daimler has announced that it will raise $2.67 billion to fund future operations, reports Automotive News [sub]. But since we know that the BMW share swap has been nixed by the Quandts, how is Daimler coming up with the cash? By snaffling Opel’s cash from the German government? Or perhaps by jumping on the DC bailout express? No, Daimler followed the real money back to the Persian Gulf. Abu Dhabi’s Aabar Investments (owned by the state-run International Petroleum Investment Company) will buy a 9.1 percent stake in the German firm. After all, when you’ve repeatedly been fined for violating CAFE standards, you go to the oil wells, not the halls of government for your cash injection. The Emirate of Kuwait had already owned a 7.6 percent stake in Daimler, an investment that has been diluted to 6.9 percent by Aabar’s investment. But according to the analysts, Daimler had little choice but to take Aabar’s cash.
“We estimate [Daimler] will burn more than 18 million euros of cash per day in 2009, which means the capital increase would absorb not much more than 100 days of cash burn,” says Morgan Stanley’s Adam Jonas. And Jonas sees Daimler’s struggles as part of a wider trend among European automakers, predicting that Europe’s auto sector will burn over half of its capitalization over the next year.
But cash doesn’t come free. Abaar expects Daimler to cooperate with their three project areas: developing EVs that would reduce carbon emissions, developing innovative compound materials to be used in automotive manufacturing, and social projects in Abu Dhabi to educate young talent for positions in the car industry. And you know electric vehicles are in it for the long haul when oil money is invested in their development.
Better that than the gold C63.
Now we know what Princess Amidala drives. Doesn’t it get blown up in Episode II?
More seriously, I saw a mirror-polished Jag at a car show several years ago, and it was stunning. It was also ‘Not For Sale.’
If they will need more cash we’ll see more $4/gallon events.
Daimler needs cash? Why not sell their stake in Chrysler? Oh, wait… nevermind.
Just think, it was all that money we pumped over there to buy 4$/gal gas that makes this generosity possible…
Ha!
The middle-east own the USA too, if not literally in their hordes of dollars, but into the future with USA’s complete and utter dependence on oil.
Nice work, you did it all to yourselves in under 50 years.
Dammit, I hoped briefly that this was going to be a story about DB being almost bust and begging for money…kind of like they did to Chrysler. I guess after building all those buildings they STILL have money left over.