Ontario finance minister calls on Canada, Ontario to sell GM stake
TORONTO (Reuters) - The Canadian and Ontario governments should sell their stake in General Motors, which is equal to about 9 percent of GM's shares, sooner rather than later, the province of Ontario's finance minister is quoted as saying in a report in the Globe and Mail on Friday.
The two governments became shareholders in GM in 2009 when they contributed a combined C$10.8 billion ($10.89 billion) to a bailout to keep GM afloat.
"There's certain restrictions on how many (shares) we can move at once and so on, but the sooner we're out of the stock the better," Ontario Finance Minister Dwight Duncan told the newspaper.
"I just don't think governments should be buying and holding stocks in private-sector companies," he said.
Selling the stock would give an immediate boost to the coffers of both governments, which are both trying to reduce their budget deficits, the Globesaid.
The book value of the shares on the government's books is much lower than the current share price.
The governments' stake in GM, made up of around 140 million common shares and 16.1 million preferred shares, was worth C$3.5 billion at the end of September.
Federal Finance Minister Jim Flaherty has said Ottawa intends to sell its remaining shares in GM over time but that it will ensure that it gets a good deal for taxpayers.
The Canadian Auto Workers union, which represents about 61,000 workers in the country's auto industry, urged the governments to hold on to their stakes, saying they could use them as leverage to try to get a larger GM production footprint in Canada in future.
"This industry's presence in Ontario is too important to Ontario's economic and fiscal health for government not to play a central role," CAW president Ken Lewenza said in a statement.Contact Automotive News