THE DEAL (The Deal) -- Canada said late Tuesday it has sold approximately 30 million shares of General Motors (GM) for about $1.1 billion, continuing the process by governments to exit the automaker four years after GM received a massive bailout.
The Canadian Ministry of Finance office confirmed that Canada GEN Investment Corp. sold the shares, about 20% of its total holdings, to Bank of America Merrill Lynch (BAC) and RBC Capital Markets in an unregistered block trade.
Shares of GM closed at $37 apiece on Tuesday.
The sale comes days after the U.S. Treasury Department disclosed it has sold about $811 million worth of GM stock in August. Post-sales, the U.S. owns about 186 million shares of the automaker and Canada GEN holds about 110 million common shares.
The U.S. has said it hopes to exit its GM investment by early 2014, and Canadian officials in a statement Tuesday expressed a similar desire.
"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," Minister of Finance Jim Flaherty said.
"The government of Canada is committed to exiting from ownership of GM as quickly as feasible," he added, "while maximizing the return for Canadian taxpayers, as we demonstrated today."
The U.S., Canadian and Ontario governments received the shares in 2009 as part of a nearly $60 billion bailout and restructuring of the automaker, which otherwise would have run out of cash during the great recession.
The U.S. government has recouped about $35.4 billion of the $50 billion it gave to GM during the financial crisis, but would need to sell its remaining stake for more than $75 per share to break even on the investment. Canada, meanwhile, has to sell its remaining shares at more than $50 apiece to be made whole.
But the governments have argued that they believe the bailout was worth it even if the money is not fully recovered because of the number of jobs it preserved. GM in the years since the bailout has returned to profitability and in recent quarters has been expanding its North American manufacturing base.
"The value of this investment can be seen in the jobs and companies saved and tax bases preserved," Flaherty said.
Written by Lou Whiteman.