Magna, the Canadian car parts maker, and Sberbank, Russia’s biggest state-controlled bank, are poised to become the new shared owners of Vauxhall, Lord Mandelson said last night.

It is believed that Magna, Sberbank, which is backed by Oleg Deripaska, the Russian aluminium tycoon, and General Motors (GM), the American carmaker, have signed a memorandum of understanding in Germany broadly agreeing to undisclosed terms to carve up the ownership of Vauxhall and Opel between them.

The Business Secretary said that he was demanding a “very early meeting” with the new potential co-parents of Vauxhall to nail down guarantees that the carmaker’s production would remain in the UK. Under the arrangement, GM, the present American holding company, would also retain a stake in the European business.

Although Magna and the Russians are in pole position, any final deal is subject to extensive due diligence into the accounts of both Opel and Vauxhall. It is expected that a formal deal may not be signed off for weeks.

Karl-Theodor zu Guttenberg, the German Economy Minister, with whom Lord Mandelson has negotiated closely over the future of GM Europe, said that Magna had put forward “new ideas” after talks faltered on Thursday over GM’s request for an additional €300 million (£262 million).

Opel and Vauxhall form the backbone of GM’s European business. The American car company is on the brink of collapse and it had been feared that if it filed for bankruptcy protection, the European businesses would also fail.

Magna tabled an eleventh-hour takeover plan for Opel and Vauxhall yesterday before a crunch meeting to decide the fate of the European car group. The meeting, which was aimed at choosing a suitable owner for GM’s European business and to sign off billions in short-term loans and guarantees, was delayed by two hours as officials examined Magna’s bid plans.

Executives of Opel and Vauxhall were scrambling to clinch a deal in a hotel near the Brandenburg Gate in Berlin before a scheduled meeting with Angela Merkel, the German Chancellor. Officials in Germany want to place Opel assets in a temporary trust to shield them from creditors before GM files for bankruptcy protection in the United States.

Armin Schild, a director of Opel, said: “GM’s insolvency is right around the corner. The hourglass is almost out of sand.”

The German Government has offered a €1.5 billion bridging loan to keep Opel afloat until the spin-off is completed. However, Mrs Merkel will refuse to sign the cheque unless the Obama Administration and GM’s board drop objections to her plan for trustees to run Opel in the interim.

Magna was effectively given first refusal on Opel after Fiat, the Italian carmaker that also was bidding for GM Europe, withdrew from talks.

Last night a court in the United States was close to ruling whether to allow Chrysler’s bid to escape liquidation through an alliance with Fiat. Meanwhile, a Swedish court ruled that Saab, a loss-making GM unit, would be protected from its creditors until August 20, giving it more time to restructure.

In the US, the United Auto Workers said that it had approved a deal that should allow GM to cut its workforce costs by up to $2 billion (£1.24 billion) annually, which should help it to exit its expected bankruptcy filing quickly.

Chapter and verse

Under Chapter 11 of the US Bankruptcy Code, a company may apply to the courts for protection from its creditors while it reorganises itself to stay alive and comes up with a plan for repaying its creditors over a period of time. The equivalent in Britain is an administration order, granted by the courts, which also appoint a licensed insolvency practitioner to act as the administrator. As with Chapter 11, companies can continue to trade while in administration. The UK process is generally more supportive of creditors and the US generally better for helping businesses to survive.

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