GM close to stake sale deal with SAIC?

If the buzz on Deal St is any indication, General Motors India could be readying to offload as much as 50% equity stake to Chinese truck maker SAIC Motor Corp.

An equal partnership between the two companies, if it happens, would mirror their relationship in China where the joint venture company is called Shanghai General Motor Corp and makes passenger vehicles.

SAIC has been eyeing entry into the Indian light commercial vehicles (CV) market for some time and speculation has bee rife about the Chinese company picking up minority stake in GM India in return for getting ready manufacturing facilities for its products.

Sources told DNA Money late Thursday evening that GM India is expected to announce the stake divestment and subsequent formation of a joint venture to employees over the next few days and is finalising paperwork needed for this deal to go through.
The size of this deal could not be ascertained.

Despite several attempts, GM India president Karl Slym remained unreachable for comments.

A senior company official denied any knowledge of such a development.

The need to fund new product development and working capital needs are perhaps the biggest reasons for GM India’s bid to offload equity to SAIC.