General Motors Corp., which is struggling to turn around its North American
automaking operations, announced Monday that it has reached an agreement to sell
a 51 percent stake in its profitable finance arm.
In a file photo the General Motors Acceptance
Corp. headquarters is seen in Horsham, Pa., Thursday, March 23, 2006.
General Motors Corp., which is struggling to turn around its North
American automaking operations, announced Monday, APril 3, 2006, that it
has reached an agreement to sell a 51 percent stake in its finance arm.
[AP] |
The world's biggest automaker expects to receive about $14 billion from the
sale of General Motors Acceptance Corp. over the next three years.
The stake is being purchased by a consortium of investors led by Cerberus
Capital Management L.P., a private investment firm. The group also includes
Citigroup Inc. and Aozora Bank Ltd.
GM will receive $7.4 billion from the consortium at closing and an estimated
$2.7 billion cash distribution from GMAC related to the conversion of most of
GMAC and its U.S. subsidiaries into limited liability companies.
In addition, GM will retain about $20 billion of GMAC automotive lease and
retail assets and associated funding with an estimated net book value of $4
billion that will monetize over three years.
GM, which lost $10.6 billion in 2005 and has been rapidly losing U.S. market
share to Asian competitors, has been trying to cut its own labor, pension and
health care costs. Its problems could multiply if workers at its main supplier,
Delphi Corp., go on strike.
On Friday, Delphi asked a bankruptcy judge to void its labor agreements, and
the United Auto Workers said a strike would be inevitable if the judge agrees to
it.