OTTAWA: Canada’s government is selling its final stake in General Motors Co., worth about $2.7 billion, as Prime Minister Stephen Harper seeks new funding to meet pre-election promises amid an oil rout.
Canada has agreed to sell its 73.4 million shares to Goldman Sachs & Co. in an unregistered block trade, the finance department said in a statement Monday. The transaction will be complete by April 10.
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The proceeds will help Harper stick to his promise of balancing the budget this fiscal year even as he delivers tax cuts and transfer payments ahead of a general election in October. Falling oil prices means annual revenue will be on average C$7.6 billion ($6.1 billion) less than forecast by the government in November, according to the parliamentary budget office.
“Our investment in GM was always meant to be temporary,” Joe Oliver, Canada’s Minister of Finance, said in an e-mailed statement. “We never believed the government should be a shareholder of a private-sector company for an indefinite period of time.”
At Monday’s closing price of $36.66, those shares would be worth about $2.69 billion. The finance department didn’t say how much it will raise from the transaction or how the proceeds will be budgeted. Details will be revealed when Canada GEN Investment Corp., the entity that held the shares, reports its trade with securities regulators in the next several days, the government said in the statement.
