General Motors to Sell Equity Stake in Isuzu Motors Ltd.
Will maintain strong strategic alliance
General Motors Corp. (NYSE: GM) today announced it would sell its 7.9 percent equity stake in Isuzu Motors Ltd. The commercial partnership between GM and Isuzu will continue.
The Isuzu shares held by GM will be sold to Isuzu’s strategic business partners and major shareholders, Mitsubishi Corp., Itochu Corp. and Mizuho Corporate Bank. GM currently holds a total of 90.09 million Isuzu shares. Based on a selling price of JPY 397 per share, GM expects to realize cash proceeds of about USD $300 million, which will be used to support the North American turnaround plan, finance future growth initiatives, strengthen the balance sheet and fund other corporate priorities.
“GM’s 35-year relationship with Isuzu has been strong, and we look forward to our continued partnership,” said Rick Wagoner, GM chairman and chief executive officer. “We will maintain our strategic relationships with Isuzu in the many different areas of cooperation we have established over the years. At the same time, GM will take another step to enhance our liquidity position.”
GM has held an equity stake in Isuzu since 1971, when it purchased approximately 34 percent of the Isuzu shares outstanding. Between 1971 and 1998, GM increased its stake to 49 percent from 34 percent. In 2002 as part of the Isuzu restructuring, GM cancelled shares related to its 49 percent stake and invested fresh capital of $500 million primarily for the purchase of certain strategic commercial assets and for a new equity stake of 12 percent in Isuzu. Between 2002 and 2005 GM's stake in Isuzu was diluted from 12 percent to the current 7.9 percent, due to conversion of Isuzu's convertible bonds.
Over the last 35 years, the companies have been involved in various joint projects in product development, advanced technology, global purchasing and supply chain management, and product distribution. Among the successful collaborations that will continue are the following:
-Midsize pickup truck assembly and distribution in Asia Pacific, Latin America, Africa, and the Middle East
-Development and manufacturing of diesel engines for passenger cars in Europe
-Development and manufacturing of diesel engines for full-size pickups in the United States
-Commercial vehicle design, engineering and manufacturing
The sale of GM’s equity stake in Isuzu, including cash proceeds received and any potential gain on sale, will be recorded in the second quarter. GM expects a pre-tax gain on the sale of approximately $300 million from this transaction as GM’s book base was written-down to zero in 2002.
>>>For Sale? Clicky!<<<
-----The orginal Mr.Goodwrench on the JBO since 11/99-----
man there selling everything.....
what does this mean for isuzu? all their cars here in the US are rebadged GM's exsept for the xl-7 or whatever it's called
97cavy22 wrote:man there selling everything.....
what does this mean for isuzu? all their cars here in the US are rebadged GM's exsept for the xl-7 or whatever it's called
Isn't the xl-7 a Suzuki?
Disclaimer: I will probally offend you with what is written in this post.
