UPDATE 2-Canada, Ontario sell part of GM stake for about $1.1 bln

Tue Sep 10, 2013 8:49pm EDT
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By Jeffrey Hodgson

TORONTO, Sept 10 (Reuters) - The Canadian and Ontario governments said on Tuesday they would sell nearly a quarter of their common shares in General Motors Corp, part of a longer-term plan to shed the stock they acquired in 2009 when they helped the U.S. government bail out the automaker.

The two governments will sell 30 million GM common shares in a block trade to Bank of America Merrill Lynch and RBC Capital Markets, a unit of Royal Bank of Canada.

The Canadian government said the shares were sold at the closing market price on Tuesday, minus a small discount. GM shares finished the session at $37, putting the value of the stake at about $1.11 billion.

"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," Finance Minister Jim Flaherty said in a statement.

"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."

The governments of Canada and the province of Ontario, the heartland of the country's auto sector, became shareholders of GM in 2009 when they together contributed more than C$10 billion ($9.66 billion) to a bailout to keep GM afloat.

In return for their investment, the two governments required that the automaker maintain its share of production in Canada for several years moving forward.   Continued...