GM, which has 12 JVs in China, announced it has bought 1% stake in its JV with Chinese partner SAIC Motor.
GM has sold its 1% stake back to SAIC, which after this deal owned 51% of the JV, in return for some cash and a loan to avoid bankruptcy in 2009. SAIC offered $84.5 million for the stake and help in getting a $400 million line of credit the company used to bring its Korean operations back on track. After avoiding bankruptcy the US automaker closed a deal with SAIC in September 2012 to buy back the stake for $119 million.
Only on February 14th did HM CFO Dan Ammann confirm the deal, after reporting the fourth-quarter results. This deal will increase the US automaker’s ownership of Shanghai GM back to 50%, according to the US Securities and Exchange Commission filling.
According to the agreement reached in September, Shanghai GM will be split into an overarching operational arm and a sales arm. GM and SAIC will equally divide their control over the operational side, which is responsible for the hiring, product decisions and budget. SAIC will own 51% of the sales arm, responsible with the revenue.
by Ana Cezara Savin
) - Monday, February 18th, 2013 - filed under General Motors
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