General Motors Co, the biggest overseas auto maker in China, said it intends to exercise an option to buy back a 1 percent stake in its main car venture in the country to make it an equally held unit with its partner.
"We have an option to buy that 1 percent," Chief Executive Officer Dan Akerson told shareholders on Tuesday at the auto maker's annual meeting in Detroit. "It's our intention to exercise that."
GM sold a 1 percent stake in Shanghai General Motors Co to partner SAIC Motor Corp in 2010, reducing its holding to 49 percent. GM received a call option at the time to repurchase the 1 percent stake.
SAIC, China's largest domestic car maker, paid US$84.5 million for the shares, which allowed it to include Shanghai GM's revenue in its accounts as a majority shareholder under new local accounting standards. The deal was approved by the Chinese government in February 2010.
"Any possible repurchase by GM needs to meet the condition that SAIC can include Shanghai GM's revenue into our accounts," Zhu Xiangjun, a spokeswoman for SAIC, said by telephone. "That's why we bought the shares in the first place."
