updated 3/23/2006 3:13:15 PM ET 2006-03-23T20:13:15

General Motors Corp., struggling to restore its financial vigor, said Thursday its finance arm sold a majority stake in its commercial mortgage division, raising nearly $9 billion in cash that could make the rest of its finance business more attractive to potential bidders.

General Motors Acceptance Corp. is getting $1.5 billion in cash from an investment group for a 78 percent stake in the commercial mortgage business. In addition, that business, known as GMAC Commercial Holding Corp., repaid $7.3 billion in intercompany loans. That boosts the total proceeds to GMAC to almost $9 billion.

The announcement comes a day after GM and its major supplier, Delphi Corp., said they plan to offer buyouts to more than 125,000 hourly workers under an agreement with the United Auto Workers. Workers are expected to start leaving GM by June 1.

The world’s biggest automaker is under enormous pressure to reverse its fortunes. It recently had to increase by $2 billion its reported 2005 loss to $10.6 billion. It has been losing U.S. market share to Asian automakers who are building cars that are among the most popular with American consumers. And it needs to raise money to defray the costs of the buyouts.

The buyer group includes Kohlberg Kravis Roberts & Co., Five Mile Capital Partners and Goldman Sachs Capital Partners.

GMAC said in August that it had agreed to sell a 60 percent stake in its commercial mortgage holding business to Kohlberg Kravis and the other partners, but no financial details were released at that time. The mortgage unit has a loan servicing portfolio of around $250 billion.

The deal for the mortgage unit stake is separate from GM’s announced plans to sell a controlling interest in GMAC.

“This sale is good news for GMAC and provides GMAC with even greater liquidity,” GMAC spokeswoman Joanne Krell said.

GMAC Commercial Holding also announced that it has changed its name to Capmark Financial Group Inc. The name change will be fully implemented in the second quarter of this year. Capmark “will launch with an investment-grade rating,” Krell said.

GM’s debt rating has been slashed in recent months below investment grade. Some major investors are prohibited from buying bonds without an investment-grade rating and that makes it tougher and more expensive for the borrower to raise money.

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