Suzuki Motor Corporation today said it bought back about three per cent stake in the company from cash-strapped General Motors for about $231 million as the troubled US automaker ended its 27-year investment in the Japanese company to raise funds to avert bankruptcy.
The company said it bought back all the 1,64,13,000 Suzuki shares from GM for 1,363 yen per share, the same price of the stock's closing quote on Monday, through off-hours trading on the Tokyo Stock Exchange.
With the buyback, Suzuki now owns about a 20 per cent of its own outstanding shares, Kyodo news agency reported.
"There will be no impact on Suzuki's current business plan," Osamu Suzuki, Chairman and CEO, Suzuki Motor Said in a statement yesterday, indicating that they will cooperate to jointly develop environmentally friendly cars.
"As GM taking this particular step to sell the shares it owns as a step toward strengthening its balance sheet is very understandable, we wanted to support GM's decision," Suzuki had said.
With the stock sale, GM now owns no stake in any Japanese automaker as it already sold its entire stake in Isuzu Motors and Fuji Heavy Industries in recent years amid deteriorating earnings.
In 1981, Suzuki and GM entered a capital tie-up, when GM acquired a 5.3 per cent stake in the Japanese car-maker known for its compact cars.
The stake was bolstered to 20 per cent in 2000 but in 2006, GM reduced its stake in Suzuki to 3 per cent as part of its restructuring programme.
Amid the worst economic crisis in the US, GM, one of the big three automakers in the US, has lost more than $70 billion since 2004. The Detroit-based company lost over $20 billion this year and is seeking a federal bailout.
