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Government Agrees to Sell Shares of General Motors

OTTAWA, Ontario, November 18, 2010 — The Honourable Jim Flaherty, Minister of Finance, today confirmed that Canada GEN Investment Corporation (Canada GEN) has agreed to sell 30,453,205 shares of common stock of General Motors Company (GM) at a public offering price per share of US$33. Canada GEN has also granted the underwriters of the initial public offering the option to acquire from Canada GEN up to an additional 4,567,981 shares at the same price to cover over-allotments.

“Many Canadian auto industry workers still have a jo ecause of the decision taken by the Government of Canada to provide financial support to General Motors to keep the company as a viable business in the midst of the recent economic downturn,” said Minister Flaherty. “This was a very difficult decision to make, but it was necessary in order to avoid the significant harm that would have been done to the company’s employees, their families and their communities.”

“The recovery of the automotive sector over the past year demonstrates that the financial assistance provided by governments has had the desired effect in terms of protecting Canadian jobs, now and for the future,” he continued.

As part of the restructuring of General Motors, governments were issued common equity in the new company as well as preferred shares, in exchange for the financial assistance they had provided to GM.

Now that General Motors is again becoming a publicly-traded company, the Government has begun to reduce its ownership in the company.

“When the global recession took hold, the North American auto industry was clearly in trouble. Canada's auto sector employs, directly or indirectly, over 400 thousand people - all of whom depend on a strong auto industry to pay the mortgage, keep the lights on, and keep food on the table for their families,” said the Honourable Tony Clement, Minister of Industry. “It’s clear now that we have made the right decision. Thanks to our decisive action, the Canadian auto industry is emerging from the recession showing clear signs of recovery.”

Canada GEN, a wholly-owned subsidiary of the Canada Development Investment Corporation, holds Canada’s interest in GM.

News source: Department of Finance

 

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