The Canadian and Ontario governments announced they would sell nearly a quarter of their common shares in General Motors Corp as part of their long-term plan to release the stock they acquired in 2009 when they helped the U.S. government bail out the automaker.
In a block trade to Bank of America Merrill Lynch and RBC Capital Markets, a unit of Royal Bank of Canada, the two governments will sell 30 million GM common shares. The administration said the shares were sold at the closing market price on Tuesday, minus a small discount. GM shares finished the session at $37, putting the value of the stake at about $1.11 billion.
“As we said from the start, our investment in GM was always meant to be temporary as we worked to maximize the return to Canadian taxpayers,” Finance Minister Jim Flaherty said in a statement. “The Government of Canada is committed to exiting from ownership of GM as quickly as feasible, while maximizing the return for Canadian taxpayers, as we demonstrated today.”
The governments of Canada and the province of Ontario, the heartland of the country’s auto sector, became shareholders of GM in 2009 when they together contributed more than Canadian $10 billion ($9.66 billion) to a bailout to keep GM afloat.
Canada GEN Investment Corp., the holding vehicle for the GM shares owned by the two governments, will still hold more than 110 million GM common shares when the deal closes on September 16. It will also hold more than 16.1 million preferred shares.