Will maintain strong strategic alliance
DETROIT, April 11 /PRNewswire-FirstCall/ -- General Motors Corp.
(NYSE: GM) today announced it would sell its 7.9 percent equity stake in Isuzu
Motors Ltd. The commercial partnership between GM and Isuzu will continue.
The Isuzu shares held by GM will be sold to Isuzu's strategic business
partners and major shareholders, Mitsubishi Corp., Itochu Corp. and Mizuho
GM currently holds a total of 90.09 million Isuzu shares. Based on a
selling price of JPY 397 per share, GM expects to realize cash proceeds of
about USD $300 million, which will be used to support the North American
turnaround plan, finance future growth initiatives, strengthen the balance
sheet and fund other corporate priorities.
"GM's 35-year relationship with Isuzu has been strong, and we look forward
to our continued partnership," said Rick Wagoner, GM chairman and chief
executive officer. "We will maintain our strategic relationships with Isuzu
in the many different areas of cooperation we have established over the years.
At the same time, GM will take another step to enhance our liquidity
GM has held an equity stake in Isuzu since 1971, when it purchased
approximately 34 percent of the Isuzu shares outstanding. Between 1971 and
1998, GM increased its stake to 49 percent from 34 percent. In 2002 as part
of the Isuzu restructuring, GM cancelled shares related to its 49 percent
stake and invested fresh capital of $500 million primarily for the purchase of
certain strategic commercial assets and for a new equity stake of 12 percent
in Isuzu. Between 2002 and 2005 GM's stake in Isuzu was diluted from 12
percent to the current 7.9 percent, due to conversion of Isuzu's convertible
Over the last 35 years, the companies have been involved in various joint
projects in product development, advanced technology, global purchasing and
supply chain management, and product distribution. Among the successful
collaborations that will continue are the following:
* Midsize pickup truck assembly and distribution in Asia Pacific, Latin
America, Africa, and the Middle East
* Development and manufacturing of diesel engines for passenger cars in
* Development and manufacturing of diesel engines for full-size pickups in
the United States
* Commercial vehicle design, engineering and manufacturing
The sale of GM's equity stake in Isuzu, including cash proceeds received
and any potential gain on sale, will be recorded in the second quarter. GM
expects a pre-tax gain on the sale of approximately $300 million from this
transaction as GM's book base was written-down to zero in 2002.
General Motors Corp, the world's largest automaker, has been the global
industry sales leader for 75 years. Founded in 1908, GM today employs about
327,000 people around the world. With global headquarters in Detroit, GM
manufactures its cars and trucks in 33 countries. In 2005, more than 9
million GM cars and trucks were sold globally under the following brands:
Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac,
Saab, Saturn and Vauxhall. GM operates one of the world's leading finance
companies, GMAC Financial Services, which offers automotive, residential and
commercial financing and insurance. More information on GM can be found at
In this press release and in related comments by General Motors'
management, the use of the words "expect," "anticipate," "estimate,"
"forecast," "initiative," "objective," "plan," "goal," "project," "outlook,"
"priorities," "target," "intend," "evaluate," "pursue," "seek," "may,"
"would," "could," "should," "believe," "potential," "continue," "designed,"
"impact," or the negative of any of those words or similar expressions is
intended to identify forward-looking statements. These forward-looking
statements include GM's intended use of the net proceeds from the sale of the
Isuzu shares. While these statements represent our current judgment on what
the future may hold, and we believe these judgments are reasonable when made,
these statements are not guarantees of any events or financial results, and
GM's actual results may differ materially due to numerous important factors
that may be revised or supplemented in subsequent reports on SEC Forms 10-Q
and 8-K. Such factors include, among others, the following: the selling price
per share of the Isuzu shares sold by GM; GM's ability to effect the sale of
the shares at levels and times planned by management; changes in currency
exchange rates; changes in our accounting assumptions that may require or that
result from changes in the accounting rules or their application; changes in
the existing, or the adoption of new, laws, regulations, policies or other
activities of governments, agencies and similar organizations; and the
occurrence of unforeseen events or changed business conditions which could
result in application of the net proceeds from the sale of the Isuzu shares in
a manner other than as described in this press release or in related comments
by GM's management.
Investors are cautioned not to place undue reliance on forward-looking
statements. GM undertakes no obligation to update publicly or otherwise
revise any forward-looking statements, whether as a result of new information,
future events or other such factors that affect the subject of these
statements, except where expressly required by law.
SOURCE General Motors Corp.
Rob Leggat, +82-11-442-8902, Toni Simonetti, +1-212-418-6380, or mobile +1-917-822-3392, Gina Proia, +1-212-418-6389, or mobile - +1-914-714-9166, all of
General Motors Corp.
-0- Apr/11/2006 8:00 GMT
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