Washington — The Obama administration said Wednesday it will sell 200 million shares
— or 40 percent of its remaining stake in General Motors Co. — back to the automaker and announced plans to completely exit the Detroit automaker by March 2014.
— or 40 percent of its remaining stake in General Motors Co. — back to the automaker and announced plans to completely exit the Detroit automaker by March 2014.The Detroit automaker said it will purchase 200 million shares of GM stock held by Treasury for $5.5 billion — or $27.50 per share — nearly $2 above the stock's closing price on Tuesday. GM shares jumped sharply on the news and were up 6.7 percent to $27.10, or $1.59.
The U.S. Treasury — after more than a year of refusing to say when it might start selling its remaining stake in GM — said it will announce a written plan in January to shed its remaining 300 million shares over the next 12 to 15 months — likely in a series of small stock sales.
The Treasury's move is intended to minimize the impact of the stock sale on the share price.
The exit plan may prove to be a boost to GM's lagging stock price and to some car buyers, who have avoided GM because of the "Government Motors" label.
Still, taxpayers will almost certainly lose billions of dollars in the $49.5 billion GM bailout. If the government sold the rest of its stock at current prices, taxpayers would lose more than $13 billion.
"The government should not be in the business of owning stakes in private companies for an indefinite period of time," Assistant Treasury Secretary Tim Massad said. "Moving to exit our investment in GM within the next 12 to 15 months is consistent with our dual goals of winding down TARP as soon as practicable and protecting taxpayer interests."
From The Detroit News: http://www.detroitnews.com/article/20121219/AUTO0103/212190382#ixzz2FVxUEsIe
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