The Canadian and Ontario governments said on Tuesday they would sell nearly a quarter of their common shares in General Motors, part of a longer-term plan to shed the stock they acquired in 2009 when they helped the U.S. government bail out the automaker.
The two governments will sell 30 million GM common shares in a block trade to Bank of America/Merrill Lynch and RBC Capital Markets, a unit of Royal Bank of Canada.
The Canadian government said the shares were sold at the closing market price on Tuesday, minus a small discount. GM shares finished the session at $37, putting the value of the stake at about $1.11 billion.
"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," Finance Minister Jim Flaherty said in a statement.
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"The Government of Canada is committed to exiting from ownership of GM as quickly as feasible, while maximizing the return for Canadian taxpayers, as we demonstrated today."
The governments of Canada and the province of Ontario, the heartland of the country's auto sector, became shareholders of GM in 2009 when they together contributed more than C$10 billion ($9.66 billion) to a bailout to keep GM afloat.
In return for their investment, the two governments required that the automaker maintain its share of production in Canada for several years moving forward.
Canada GEN Investment Corp., the holding vehicle for the GM shares owned by the two governments, will still hold more than 110 million GM common shares when the deal closes on September 16. It will also hold more than 16.1 million preferred shares.
The Ontario government said it will receive one third of the net cash proceeds with two-thirds going to the federal government, which was the ratio of the financial support it provided to GM.
After the sale of its 10 million shares, Ontario will still hold nearly 36.7 million GM common shares and about 5.4 million shares of GM preferred stock through Canada GEN.
"We will invest the proceeds to continue to grow our economy, create jobs and balance the budget." Ontario Finance Minister Charles Sousa said in a statement.
The U.S. Treasury said last December that it plans to sell its entire stake in GM over 15 months.