Breaking: GM looking at strategic options for GMACGMI has just learned this morning from a reputable source that GM is exploring strategic options for GMAC. This isn't surprising with problems in the market and a shakey financial outlook on Wall Street.
The obvious goal is for GM to raise much needed cash. However, since Cerberus now controls a 51% stake in GMAC, the private equity firm may be looking to get more money to fund its own operations.
It also follows closely on the heels of the news that GM is close to confirming the sale of HUMMER and a GM owned, French transmission factory.
Some could speculate that Cerberus is trying to leverge GMAC to buy the remaining 20% stake in Chrysler that it does not already own. Or perhaps Cerberus plans to somehow leverage both GMAC and Chrysler Financial (it owns both) to help it's liquidity to ride out the tought times ahead. Or any other measure behind the move.
Regardless, any move will need Cerberus' blessing to move forward.
Some of these options may include:
-Selling the money losing part of GMAC, dubbed Rescap. This unit is the mortgage unit of the GMAC group. If this happens, the GMAC Bank may also be sold in tandem with the Rescap mortage unit.
-Orchestrate another stake in GMAC being sold. GM could sell a portion of their remaining 49% stake to Cerberus or another company to raise additional funds (again, Cerberus would have to okay).
-A possible merger and/or sell off of GM's entire stake in GMAC. Seeing as how many financial firms have made moves to merge or pick off assets in light of the crisis on Wall Street, this may also be an option.
-Purchasing a bank with an IPO of GMAC, which would would allow Cerberus and GM to keep power, and take in alot of the profit/and loss of the combine company if set up correctly.
This by no means is a the last word on this. We will know more about GMAC's situation once the Board of Directors meets next month.