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| GM said to have agreement with Sichuan Tengzhong on Hummer |
| Bloomberg / Michigan Jun 03, 2009, 00:57 IST |
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General Motors Corp plans to sell its Hummer brand of sport-utility vehicles to Sichuan Tengzhong Heavy Industrial Machinery Co Ltd, a Chinese equipment maker, according to five people familiar with the situation.
GM, which filed for bankruptcy protection on Monday, has a memorandum of understanding with the Chengdu, China-based company, said the people, who declined to be identified because the agreement is confidential. At least one other party is still interested in buying Hummer, though those talks are on hold, one of the people said.
The deal should be completed by the end of the third quarter, Detroit-based GM said in a statement on Tuesday disclosing the memorandum of understanding. The biggest US carmaker didn’t identify the buyer or financial terms of the accord. Hummer was estimated to be worth $500 million, Chief Executive Officer Fritz Henderson said in bankruptcy court documents.
Tengzhong is a privately owned maker of special-use vehicles, structural components for highways and bridges, and construction machinery, according to its Web site. A call to the company after regular business hours was not answered. A GM spokesman, Nick Richards, said he could not comment on speculation.
GM won approval in its first day in bankruptcy court to sell assets as soon as next month after collapsing under $172.8 billion in debt and failing to adapt to consumer demands for models that use less fuel. It also expects to shed Saturn and Saab as part of its restructuring.
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