GM talks to SAIC on stake sale

By Soyoung Kim | February 13, 2009, Friday |

Print Edition

GENERAL Motors Corp has held talks with China's SAIC Motor Corp about selling part of its stake in their joint venture or other assets as the United States auto maker races to raise cash, two sources familiar with the discussions said.

GM approached SAIC Motor recently with an offer to sell some of its stake in their 50-50 joint venture that builds and markets Buick, Cadillac and Chevrolet models in China, the sources said.

The sources requested anonymity because they were not authorized to discuss the preliminary talks.

Such a deal would make GM a minority partner at its decade-old flagship venture in China, Shanghai General Motors Ltd, considered to be one of the remaining crown jewels in its global operations.

The talks with SAIC Motor are taking place as GM pushes to win big concessions from its bondholders and major union to show it can become viable under a US$13.4-billion US government bailout.

GM has until Tuesday to submit a new restructuring plan to the US government detailing the progress it has made in cutting costs and shoring up its balance sheet.

"It is feasible that GM could cut its stake in Shanghai GM to help raise money," said analyst John Zeng of IHS Global Insight. "GM could manage to buy back the shares later if it can stave off bankruptcy."

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GM talks to SAIC on stake sale

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