Nearly 73.4 million shares of General Motors Company GM, which are currently held by Canada GEN Investment Corporation, will be sold to Goldman, Sachs & Co under an unregistered block trade. Canada GEN expects this deal to be completed by Apr 10, 2015.
Canada GEN is a wholly owned subsidiary of Canada Development Investment Corporation. After this sale, Canada GEN will have sold its entire stake in General Motors. The sale proceeds will be mainly in U.S. dollars, which will be converted into Canadian dollars over time.
Taxpayers' stake in General Motors was around $2.69 billion based on the closing price of $36.66 on Apr 6, 2015. Canada GEN undertook the recent strategy to sell off all the shares of General Motors in order to balance its own books by 2015-2016. It had to face a negative economic impact due to the global oil slump.
Apart from Canada GEN, the U.S. Department of Treasury had also provided a bailout loan of $49.5 billion to General Motors following its bankruptcy in 2009. The department has divested its entire stake in the company and recovered a total of $39 billion, thus incurring a loss of $10.5 billion. Another $826 million was lost due to the write-off of administrative claims against the company, widening the total loss to $11.2 billion.
General Motors currently carries a Zacks Rank #1 (Strong Buy).
Better-ranked auto stocks include Allison Transmission Holdings, Inc. ALSN, Gentherm Incorporated THRM and PACCAR Inc. PCAR. While Allison Transmission Holdings and Gentherm sport a Zacks Rank #1 (Strong Buy), PACCAR carries a Zacks Rank #2 (Buy).
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