GM said it expected to receive about $14 billion from the sale of General Motors Acceptance Corp. over the next three years.
The stake is being purchased by a consortium of investors led by Cerberus Capital Management., a private investment firm. The group also includes Citigroup and Aozora Bank.
GM will receive $7.4 billion from the consortium and an estimated $2.7 billion cash distribution from GMAC related to the conversion of most of GMAC and its U.S. subsidiaries into limited liability companies.
In addition, GM will retain about $20 billion of GMAC automotive lease and retail assets and associated funding with an estimated net book value of $4 billion that will monetize over three years.
GM chairman and chief executive Rick Wagoner said the sale was an important part of efforts to restore the world's biggest automaker to profitability.
"This agreement is another important milestone in the turnaround of General Motors. It creates a stronger GMAC while preserving the mutually beneficial relationship between GM and GMAC," Wagoner said in a statement.
The deal came amid speculation Wagoner's future was in doubt.
GM, which lost $10.6 billion in 2005 and is losing market share to Asian competitors, is facing a stike at its main supplier, Delphi, go on strike.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.