GM sells remaining 3% stake in Suzuki Motor for $230 million
American auto giant General Motors Corp. has informed that it has sold its remaining 3% stake in Suzuki Motor Corp. on the open Tokyo stock market for about $230 million.
GM said the move was "based on a mutual agreement," while the Japanese compact-car maker said it was mindful of GM's need to secure funds as it reels from a slump in auto sales in its major markets and high operating costs.
The U. S. auto giant said it sold the shares for a price that matches Suzuki's closing share price in Tokyo Monday of ¥1,363. GM first invested in Suzuki in 1981 and held as much as 20 percent of the Japanese carmaker after doubling its stake in 2001. In 2006, GM raised almost $2 billion by selling a 17.4 percent stake at 2,490 yen a share.
The U. S. carmaker is selling its stake in Suzuki as it seeks to avoid a collapse that would cost the government as much as $200 billion, according to IHS Global Insight Inc. Presently GM along with its competitor Ford Motor Co. and Chrysler LLC are struggling with mounting losses amid their worst sales year since 1991.
GM has warned that it might run out of cash in 2009 if the U. S. economic slump continues and it doesn't get U. S. government's financial support. The automaker plans to lay off about 3,600 workers beginning early next year as it slows production at 10 of its assembly plants.
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