Canada’s Finance Minister Joe Oliver today announced on April 7 the divestiture of his country’s remaining interests in General Motors (IW 500/5). It is estimated to be worth about $7 billion.
Canada GEN Investment Corp, (Canada GEN) sold all of Canada’s remaining GM common shares (73,389,831 shares) to Goldman, Sachs & Co in an unregistered block trade. Further details about the share sale will be made available when Canada GEN reports its trade with U.S. and Canadian securities regulators in the next several days.
“With today’s announcement, we have eliminated a market exposure for Canadian taxpayers and returned GM to private sector ownership, having supported its continued contribution to the Canadian economy,” Oliver said. “As we said from the start, our investment in GM was always meant to be temporary. We never believed the government should be a shareholder of a private sector company for an indefinite period of time.”
David Welch of BloombergBusiness reports that the sale comes two months after Ontario sold its remaining 36.7 million shares of General Motors for about $34 a share. That sale resulted in C$1.55 billion in gross proceeds and generated a profit of C$1.1 billion after taking into account the book value of the shares, the government said at the time.
The sale is especially useful for the country's budget as Welch points out.
Extra revenue of more than C$2 billion would give the federal government more leeway to fund new measures as it prepares to release its pre-election budget on April 21.
Harper announced C$27 billion in additional tax cuts and transfer payments over six years in October. That included a controversial measure that will allow couples with children to divide their income for tax purposes. Harper has said those cuts won’t be financed by deficits -- effectively borrowing -- a practice he pledged to end this year.