1.12.2006
GM completes sale of a controlling interest in GMAC

GM yesterday announced that it has completed the sale of a 51-percent interest in GMAC to a consortium of investors led by Cerberus FIM Investors, LLC and including wholly owned subsidiaries of Citigroup Inc., Aozora Bank Ltd. and The PNC Financial Services Group, Inc.

The transaction will preserve the mutually beneficial relationship between GM and GMAC, while improving GMAC’s access to cost-effective funding. In addition, the sale of the controlling interest in GMAC will provide significant liquidity to GM that will support its North American turnaround plan, finance global growth initiatives and strengthen its balance sheet.

“This has been a year of significant actions and progress for GM, as we aggressively execute our North America turnaround plan and position the company for long-term growth and profitability. Successfully completing the GMAC transaction has been a key priority for the company, and an important step to further support GM’s turnaround,” said GM Chairman and Chief Executive Officer Rick Wagoner. “This transaction will result in a stronger GMAC, with enhanced access to funding at lower costs and greater opportunities for growth, including leveraging their traditionally strong relationships with GM dealers.

“Although GMAC will have a new majority owner, GM and GMAC will remain strategic partners through various long-term agreements. GM will retain a 49 percent ownership stake in GMAC, and the close operating relationship between the companies will continue,” Wagoner said.

GM expects to receive approximately $14 billion in net cash proceeds and distributions over three years, after repayment of intercompany debt but before purchases of preferred equity in GMAC.