China and Middle Eastern Investors May Own Stake in GM This Week

Is “America’s” car company going to be sold to the Chinese and Middle Eastern investors?: :  Will the American public and the Congress object?: :  We shall find out this week as General Motors’ long-awaited post-Obama-bailout initial public offering will open Thursday.: : The U.S. government owns 61% of the company.: 

As reported here in early October, China, via SAIC, is very: keen on a piece of GM.: : : 

But just this week, here come the Saudis, and other Middle Eastern and Asian investors.: : 

Here’s what was on the street late Friday afternoon about it:

NEW YORK (TheStreet) — SAIC Motor, China’s largest automaker, is in talks to acquire about a 1% stake in General Motors, according to a published media report.
The stake would be worth about $500 million, said the report, published Friday on The Wall Street Journal’s Web site. The report cited an anonymous source familiar with the SAIC negotiations.
GM’s initial public offering is expected next week.

The automaker is prepared to sell more than $1 billion worth of shares to sovereign wealth funds in the Middle East and Asia, giving foreign investors about 16% of the IPO’s shares, the report added.

Middle East Oil-Wealthy Funds Step Forward

Via Gulf News’ Kuwait City Bureau:

One of the potentially interested “sovereign wealth” funds referred to is the Kuwait Investment authority.

“We have to review if it is feasible for us. If it is feasible for us we will look into it. If it is something cheap, we are interested of course,” (Bader) Al Saad said………

General Motors is currently approaching several sovereign wealth funds in the Middle East for its planned IPO of the “new GM” this month, Gulf News has learnt from people who are involved in the talks. Among them are Saudi Arabia’s Kingdom Holding, Abu Dhabi’s Mubadala as well as Qatar Holding.

Besides that, GM is also talking to Singapore’s Tem-asek Holdings, the investment arm of the Singapore government.”

Prince Al Waleed bin Talal
: : : : : : : : : : : : : : :  Prince Al Waleed bin Talal

Kingdom Holdings is owned by Prince Al-Waleed bin Talal.:  His interest in General Motors is would yet another of his: prominent American holdings:: : He has a 7% share of News Corp which owns Fox News, he has a 6% stake in Citicorp and owns the Plaza Hotel in New York.:  He also is financially backing the controversial “Ground Zero” mosque in New York, has given endowments to Harvard University, and to the Council on American-Islamist Relations (CAIR) which is an unindicted co-conspirator in a U.S. terrorism funding case.

Saudi billionaire Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud told CNBC Wednesday that his Kingdom Holding Company may invest in General Motors Co. before the U.S. automaker’s public offering.

CNBC:

The Prince said his firm will be looking “very seriously” at the company and plans to approach GM’s /quotes/comstock/13*!gm (GM 0.00, 0.00, 0.00%) :  investment banks about a pre-IPO investment.

China/SAIC connection with GM already established in overseas markets

GM is already partnered with SAIC in China with plans for that alliance to significantly expand in the Indian market.

TheDay.com:

“The alliance will challenge Maruti Suzuki India, the nation’s largest carmaker with a 41 percent market share, and Tata Motors, maker of the world’s cheapest car, the Nano.

…… The partners may introduce as many as three light commercial vehicles and two passenger cars in India by 2012. The alliance also is targeting other developing markets. Last month, it started exporting Chevrolet Sail compacts made in Shandong, China, to Chile and Peru.”

A major concern posed by the prospect of foreign ownership of General Motors is that American taxpayers have just finished a multi-billion dollar bailout of the car company.:  GM also has many defense contracts.

Here’s how the IPO was being pitched by GM last week:

GM’s Chief Financial Officer Chris Liddell, pitching investors on its initial public offering, said on Thursday earnings before interest and taxes may rise to as much as $19 billion in what it called a “high cycle” for the global automobile industry.

GM, planning to raise as much as $10.6 billion in the IPO, has reduced its hourly labour costs and will be able to produce as much as $16 billion in free cash flow with profit margins as wide as 10 per cent, Chief Financial Officer Chris Liddell said.

The old General Motors Corp was restructured in a US-backed bankruptcy last year, allowing the Detroit-based automaker to earn as much as $4.2 billion through three quarters this year.

There is another side to this story.:  For Islamic jihadi watchers, and those familiar with the largest Muslim community in America (in Detroit) Saudi ownership of GM is very troubling from a symbolic, financial and geographic standpoint.:  For that perspective, : here is commentary from Debra Schlussel, who is calling this “General Muslims. “OUTRAGE: US Taxpayer Bailed Out GM Soon to be Owned by Kuwait, Saudis

What is America’s comfort level with this?:  Speak now, or forever lose your piece of America’s car company.

As large investors jostle for new shares of the U.S. automaker, small investors appear set to lose out in the IPO.

Update Sunday, November 14, 2010::  “Joe Six Pack losing out in GM IPO”

Cross-posted at UNCOVERAGE.net

Leave a Comment

Permalinks


Share this!

Enjoy reading? Share it with your friends!

Send this to a friend