By Jeffrey Hodgson
TORONTO, Sept 10 The Canadian and Ontario
governments said on Tuesday they would sell nearly a quarter of
their common shares in General Motors Corp, part of a
longer-term plan to shed the stock they acquired in 2009 when
they helped the U.S. government bail out the automaker.
The two governments will sell 30 million GM common shares in
a block trade to Bank of America Merrill Lynch and RBC
Capital Markets, a unit of Royal Bank of Canada.
The Canadian government said the shares were sold at the
closing market price on Tuesday, minus a small discount. GM
shares finished the session at $37, putting the value of the
stake at about $1.11 billion.
"As we said from the start, our investment in GM was always
meant to be temporary as we worked to maximize the return to
Canadian taxpayers," Finance Minister Jim Flaherty said in a
"The Government of Canada is committed to exiting from
ownership of GM as quickly as feasible, while maximizing the
return for Canadian taxpayers, as we demonstrated today."
The governments of Canada and the province of Ontario, the
heartland of the country's auto sector, became shareholders of
GM in 2009 when they together contributed more than C$10 billion
($9.66 billion) to a bailout to keep GM afloat.
In return for their investment, the two governments required
that the automaker maintain its share of production in Canada
for several years moving forward.
Canada GEN Investment Corp., the holding vehicle for the GM
shares owned by the two governments, will still hold more than
110 million GM common shares when the deal closes on Sept. 16.
It will also hold more than 16.1 million preferred shares.
The Ontario government said it will receive one third of the
net cash proceeds with two-thirds going to the federal
government, which was the ratio of the financial support it
provided to GM.
After the sale of its 10 million shares, Ontario will still
hold nearly 36.7 million GM common shares and about 5.4 million
shares of GM preferred stock through Canada GEN.
"We will invest the proceeds to continue to grow our
economy, create jobs and balance the budget." Ontario Finance
Minister Charles Sousa said in a statement.
The U.S. Treasury said last December that it plans to sell
its entire stake in GM over 15 months.