OTTAWA, Sept. 10, 2013 /CNW/ - The Honourable Jim Flaherty, Minister of Finance, today confirmed that Canada GEN Investment Corporation (Canada GEN) has sold 30,000,000 shares of common stock of General Motors Company (GM) to BofA Merrill Lynch and RBC Capital Markets in an unregistered block trade. This decision is another step forward in returning GM to private sector ownership and supporting its continued contribution to the Canadian economy.
"As we said from the start, our investment in GM was always meant to be temporary as we worked to maximize the return to Canadian taxpayers," said Minister Flaherty. "We do not believe that any government should be a shareholder of a private corporation for an indefinite period of time. The Government of Canada is committed to exiting from ownership of GM as quickly as feasible, while maximizing the return for Canadian taxpayers, as we demonstrated today."
With completion of this sale, Canada GEN holds 110,084,746 shares of GM common stock and 16,101,695 shares of GM Series A Preferred Stock. 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.
Canada's auto sector is the largest industry within the Canadian manufacturing sector and a key driver of the economy, employing (directly or indirectly) more than 110,000 Canadians from automotive assembly and automotive parts production.
In 2009, the Government of Canada and the Government of Ontario provided significant financial support to the auto sector to protect jobs and help secure its long-term health and presence in Canada. The financial support was crucial in protecting jobs and positioning Canada's auto industry for future success. It is estimated that approximately 52,000 Canadian jobs were protected by the Government's action to help secure the health and presence of Canada's auto sector in the midst of a global recession.
"In the worst of the global recession, we took the necessary action to protect Canadian jobs and communities with a coordinated investment in GM and Chrysler, along with the Ontario and U.S. governments," said Minister Flaherty. "The value of this investment can be seen in the jobs and companies saved and tax bases preserved."
Only a few short years later, the industry has recovered. According to recent data from DesRosiers Automotive Consultants, the sales of passenger cars and light trucks in Canada hit a record high in August, jumping 6.5 per cent year-over-year. A total of 159,004 new vehicles were sold last month, which surpasses the previous record of 158,394 units for the same month in 2007.
Canada GEN, a wholly-owned subsidiary of the Canada Development Investment Corporation, holds Canada's interest in GM.
SOURCE: Finance Canada
For further information:
Office of the Minister of Finance
Department of Finance
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