CHICAGO: General Motors have sold its stake in Delphi Corp. back to its former parts subsidiary for $3.8 billion, the automaker said Thursday.
GM, which launched the largest initial public stock offering in history last year after emerging from a government-backed bankruptcy, said the move will result in a $1.6 billion gain in its first quarter results.
It comes shortly after GM sold its stake in former financial arm Ally Financial for one billion dollars, resulting in a $300 million book gain.
"We are systematically delivering on our commitment to strengthen and simplify our balance sheet," Dan Ammann, who takes over as GM's chief financial officer on Friday, said in a statement.
Delphi, which emerged from bankruptcy protection in December 2009, said the purchase was made with cash and part of a recently acquired $3 billion credit line.
It has also repurchased a stake by the Pension Benefit Guaranty Corporation for $594 million.
"These transactions represent an important step in positioning Delphi to continue to increase shareholder value," said Rodney O'Neal, Delphi president and chief executive officer.
"We continue to have significant financial flexibility and remain committed to pursuing opportunities that drive value creation."
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