China's Largest Automaker Weighing GM Stock Purchase
SAIC hasn't yet decided whether to invest in the new GM, although it's weighing such a deal, according to a report Tuesday in The Wall Street Journal, citing unnamed sources familiar with the matter. GM and SAIC have been building cars jointly in China since the 1990s.
Still, an expression of interest by the Chinese automaker could hit a quick dead end if the U.S. government objects to the move, Reuters reported Sunday, citing sources with knowledge that SAIC was looking to take a "single-digit" share in GM.
The U.S. Treasury, which holds a 61% stake in GM, is likely to seek overseas investment as the agency looks to pare down its investment, according to a statement posted on a government website. Retail and institutional investors will be offered shares, Treasury said.
GM declined to comment on SAIC's possible investment, noting that the company is barred by securities regulation from talking about the IPO.
GM filed papers with U.S. regulators in August to once again become a publicly traded company after succumbing to government-sponsored bankruptcy in June 2009. A new, smaller GM emerged a month later.
Though some Americans will likely object to foreign ownership should SAIC invest in the resurgent automaker, GM's stakeholders -- which also include the Canadian government and United Auto Workers -- will no doubt need all the help they can get in unloading shares. GM has reported just two quarters of profitability in post-bankruptcy form.