GM Sells Stake in Delphi for $3.8 Billion

Part of plan to strengthen balance sheet

General Motors has sold its stake in Delphi Corp. back to its former parts subsidiary for $3.8 billion, the automaker said on March 31.

GM said the move will result in a $1.6 billion gain in its first quarter results.

It comes shortly after GM sold its stake in former financial arm Ally Financial for one billion dollars, resulting in a $300 million book gain.

"We are systematically delivering on our commitment to strengthen and simplify our balance sheet," said Dan Ammann, who takes over as GM's chief financial officer on April 1.

Delphi, which emerged from bankruptcy protection in December 2009, said the purchase was made with cash and part of a recently acquired $3 billion credit line.

It has also repurchased a stake by the Pension Benefit Guaranty Corporation for $594 million.

"These transactions represent an important step in positioning Delphi to continue to increase shareholder value," said Rodney O'Neal, Delphi CEO.

"We continue to have significant financial flexibility and remain committed to pursuing opportunities that drive value creation."

Copyright Agence France-Presse, 2011

See Also

GM's U.S. Sales Jump 46%

GM China Sales Hit Record High in 2010

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