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GM sells Suzuki shares to raise emergency funds

Mon, 17 Nov 2008 00:00:00 -0800

By Tim Pollard

Motor Industry

17 November 2008 15:24

GM is flogging its entire stake in Suzuki to pump cash into its survival funds. The General owns a 3% holding in Suzuki Motor Corporation and will sell 16,413,000 shares on the open market tomorrow.

Based on today’s values, GM will raise an estimated £154 million through the sale, although Suzuki will exercise an option to buy back an equivalent number of its own shares in treasury stock.

Rick Wagoner, chairman and CEO of GM, and Osamu Suzuki, his counterpart at the eponymous Japanese firm, are adamant that the sell-off won’t affect future collaboration. The two companies have worked together since August 1981 on a range of small-car projects.

Suzuki said: ‘GM taking this particular step to sell the shares it owns as a step toward strengthening its balance sheet is very understandable. There will be no impact on Suzuki’s current business plan.’

In a separate move, Germany's chanceller Angela Merkel is meeting with GM Europe top  brass to discuss financial aid. They are worried that Opel could go belly-up if General Motors runs out of cash.

By Tim Pollard