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GM may sell Chinese stake

Written By Trading Forex News on Saturday, December 5, 2009 | 6:45 AM


GM is in talks to raise cash by giving up control of its Chinese operations, according to reports.

GM operates in China in a 50-50 deal with SAIC, and is proposing to give up a one per cent share in the company - and therefore control - in exchange for cash.

Although no figure has been put on how much cash the deal would raise, analysts say it is believed to be around 20 per cent of the Chinese operations' actual worth.

Under the deal GM would also transfer half of its India operations to SAIC. However, it would have a buy back right for all the transferred shares at a later date, provided it paid a premium price.

GM's joint ventures in China sold a combined 1.46 million cars for the year up to the end of October, placing it as the top car seller in the region.

However, GM is looking to raise finances to fund its restructuring of GM Europe and to pay back its US government loans.

GM and SAIC declined to comment on a possible deal.


by autocar.co.uk

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