UPDATE 2-GM near deal to sell China venture control-sources
* GM would sell 1 pct stake in GM-SAIC China joint venture
* GM to transfer half of India business to SAIC in new JV
* GM would have option to buy back China venture stake (Adds GM sales in China)
General Motors Co [GM.UL] is nearing a deal to sell majority control of its China venture and transfer half of its India operations to Chinese partner SAIC, sources with knowledge of the situation said on Thursday.
The pending deals would give GM an infusion of cash as it restructures after emerging from bankruptcy in July -- and reshape the U.S. automaker's profile in two of the world's fastest-growing markets.
The deals with SAIC also come at a time when GM has opted to retain and turn around its European Opel operations in a restructuring it estimated would cost about 3.3 billion euros, reversing a decision to sell a controlling stake in the unit.
GM had a cash hoard of almost $43 billion at the end of September thanks to $50 billion of U.S. government support that has made the U.S. Treasury a 61-percent owner, but the company has made it a priority to repay debt to U.S. taxpayers quickly, possibly as early as June.
Under the deal expected to be announced shortly, GM would sell 1 percent of its 50-50 China joint venture to SAIC Motor Corp (600104.SS), China's biggest automaker, two sources briefed on the deal told Reuters on the condition of anonymity because the talks are private.
That transaction would give SAIC a controlling stake in GM's fastest-growing market. SAIC could pay up to 20 percent of the joint venture value to take control, while GM would have the option of buying back the stake later at a premium, the sources said.
GM was not immediately available to comment. SAIC declined to comment.
SAIC suspended trading in its shares on the Shanghai stock market on Thursday pending an announcement on what it called a "major asset restructuring". The automaker said it would hold a board meeting before Dec. 9 to discuss the move.
In a related pending deal, GM would transfer half of its operations in India to SAIC by setting up a 50-50 joint venture with its China partner, one of the sources said.
That transaction will require approval from Indian government regulators, the source said.
The pending deals come almost a year after GM held an initial round of discussions with SAIC to sell part of its China joint venture stake or other assets to raise cash in a restructuring that was then aimed at avoiding bankruptcy.
Sources briefed on the matter had told Reuters in February GM was in wide-ranging discussions to sell assets to SAIC.
Discussions about selling GM's China joint venture stake in early 2009 were scuttled under former Chief Executive Rick Wagoner. His successor, Fritz Henderson, resigned in a split with GM's board on Tuesday.
Chairman and Acting Chief Executive Ed Whitacre has said GM's priority will be to push faster toward returning to profitability and repaying U.S. taxpayers.
Source: UPDATE 2-GM near deal to sell China venture control-sources
* GM to transfer half of India business to SAIC in new JV
* GM would have option to buy back China venture stake (Adds GM sales in China)
General Motors Co [GM.UL] is nearing a deal to sell majority control of its China venture and transfer half of its India operations to Chinese partner SAIC, sources with knowledge of the situation said on Thursday.
The pending deals would give GM an infusion of cash as it restructures after emerging from bankruptcy in July -- and reshape the U.S. automaker's profile in two of the world's fastest-growing markets.
The deals with SAIC also come at a time when GM has opted to retain and turn around its European Opel operations in a restructuring it estimated would cost about 3.3 billion euros, reversing a decision to sell a controlling stake in the unit.
GM had a cash hoard of almost $43 billion at the end of September thanks to $50 billion of U.S. government support that has made the U.S. Treasury a 61-percent owner, but the company has made it a priority to repay debt to U.S. taxpayers quickly, possibly as early as June.
Under the deal expected to be announced shortly, GM would sell 1 percent of its 50-50 China joint venture to SAIC Motor Corp (600104.SS), China's biggest automaker, two sources briefed on the deal told Reuters on the condition of anonymity because the talks are private.
That transaction would give SAIC a controlling stake in GM's fastest-growing market. SAIC could pay up to 20 percent of the joint venture value to take control, while GM would have the option of buying back the stake later at a premium, the sources said.
GM was not immediately available to comment. SAIC declined to comment.
SAIC suspended trading in its shares on the Shanghai stock market on Thursday pending an announcement on what it called a "major asset restructuring". The automaker said it would hold a board meeting before Dec. 9 to discuss the move.
In a related pending deal, GM would transfer half of its operations in India to SAIC by setting up a 50-50 joint venture with its China partner, one of the sources said.
That transaction will require approval from Indian government regulators, the source said.
The pending deals come almost a year after GM held an initial round of discussions with SAIC to sell part of its China joint venture stake or other assets to raise cash in a restructuring that was then aimed at avoiding bankruptcy.
Sources briefed on the matter had told Reuters in February GM was in wide-ranging discussions to sell assets to SAIC.
Discussions about selling GM's China joint venture stake in early 2009 were scuttled under former Chief Executive Rick Wagoner. His successor, Fritz Henderson, resigned in a split with GM's board on Tuesday.
Chairman and Acting Chief Executive Ed Whitacre has said GM's priority will be to push faster toward returning to profitability and repaying U.S. taxpayers.
Source: UPDATE 2-GM near deal to sell China venture control-sources
