GM sells back Delphi stake for $3.8 billion

GM sells back Delphi stake for $3.8 billion

2011-04-01 06:54:51 GMT+7 (ICT)

DETROIT, MICHIGAN (BNO NEWS) -- General Motors (GM) on Thursday announced that it has sold its Class A membership interest in Delphi Automotive LLP (Delphi) back to Delphi for $3.8 billion.

According to GM, it will be reporting a book gain of approximately $1.6 billion in the first quarter of the year related to the sale.

GM had previously acquired the Class A membership interest in October 2009 in conjunction with the creation of Delphi, but after the announcement, GM will be simplifying its balance sheet by maintaining a regular supplier-automaker relationship with Delphi.

In addition, Delphi said it had also purchased the Class C interests owned by the Pension Benefit Guaranty Corporation for $594 million. Both transactions were funded with cash on the company's balance sheet and $2.5 billion of new bank debt as part of a $3.0 billion credit facility provided by J.P. Morgan Securities LLC.

Delphi demonstrated significant growth as it reported 2010 year-end revenues of $13.8 billion and EBITDA of $1.4 billion.

Earlier in the month, GM sold its Ally Financial Series A preferred stock for $1 billion in a registered public offering, which is expected to result in a book gain of $0.3 billion to be recorded in the first quarter of the year. 

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