Shanghai Automotive Indstrial Corp, General Motor’s joint venture partner in China, has bought close to a 1% stake in GM through the latter’s initial public offering.
SAIC said it had paid nearly US$500 million for the 0.97% worth of shares in the IPO, and both companies said the share purchase will enhance their cooperation. Last year, GM transferred a 1% in its joint venture, Shanghai GM, to SAIC, which gave the latter a 51% stake, and this was followed by both companies forming a new partnership in India to market low-cost vehicles there.
The IPO has generated more than US$20 billion for the US automaker. The gains from the IPO will end the US government’s role as the majority shareholder in GM through a US$49.5 billion bailout, which came about when GM entered bankruptcy protection in June last year. It is reported that the US Treasury will receive as much as US$13.6 billion from the IPO.
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