Cincinnati Post – General Motors Corp. on Monday agreed to sell a majority share in its credit arm Monday, a defensive move analysts said would fund employee buyouts and help the beleaguered auto maker’s balance sheet. Cerberus Capital Management will buy 51 percent of General Motors Acceptance Corp. for $14 billion.
Under the terms of the deal, GM, which lost $10.6 billion last year, will get approximately $10 billion when the transaction closes, probably in the fourth quarter, and another $4 billion over the next three years. Cerberus, a $16 billion hedge fund founded in 1992, is a turn-around specialist named after the mythical dog that guarded the entrance to the underworld.
Analysts were generally supportive of the deal, but investors were more lukewarm. In trading Monday, GM’s shares fell $1.13, or 5.3 percent, to close at $20.14.
