Ottawa sells its shares in General Motors; ends ‘temporary’ investment

The federal and Ontario governments have sold a block of 30 million shares in General Motors valued in the neighbourhood of $1.1 billion.

Finance Minister Jim Flaherty said in an email that the shares were sold at Tuesday’s closing price of US$37 on the New York Stock Exchange, minus a small discount.

Both Ottawa and the Ontario government acquired millions of shares in GM in 2009 after having provided the ailing automaker with some $10.6 billion in aid during the Great Recession.

The federal government’s investment was held on behalf of the two governments by Canada GEN Investment Corp., a subsidiary of the Canada Development Investment Corp.

The Ontario government announced it was divesting its interest in 10 million GM shares, while Ottawa was selling 20 million shares.

“In the worst of the global recession, we took the necessary action to protect Canadian jobs and communities with a co-ordinated investment in GM and Chrysler, along with the Ontario and U.S. governments,” the statement issued by Flaherty’s office said.

“The financial support was crucial in protecting jobs and positioning Canada’s auto industry for future success.”

“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,” Flaherty said.

The finance minister added that Ottawa was committed to exiting selling its remaining ownership of GM “as quickly as feasible.”

Ontario Finance Minister Charles Sousa also said the province was “committed to exiting from its remaining interest in the GM shares, while maximizing the value of the government’s interest for the people of Ontario.”

With completion of the sale, Canada GEN will continue to hold more than 119 million GM commons share and 16.1 million GM series A preferred stock.

Sousa said the province would hold almost 36.7 million GM common shares and 5.4 million series A preferred Stock.