General Motors (GM) is a US carmaker that was the world’s biggest, although Toyota is challenging it for the title. It was hard hit by the global financial crisis, needing a government bailout, but emerged from chapter 11 reorganisation in 2009, and held an initial public offering in 2010. It returned to profit in 2011.
Government sells another US$811m in GM stock
The government is getting closer to selling all of its General Motors stock.
The Treasury Department said in its August report to Congress that it sold US$811 million worth of GM common stock last month.
The report dated Tuesday says the government has recovered about US$35.4 billion of the US$49.5 billion bailout it gave the Detroit automaker. That means taxpayers are still US$14.1 billion in the hole.
The Treasury says the price per share of stock sold in July and August will be revealed at a later date.
GM stock sold in a range of US$33.50 to US$37.18 in August. At the midpoint of US$35.34, the government would have sold roughly 23 million shares. In July, the government sold US$877 million worth of stock. At the midpoint of US$35.56, it would have sold roughly 25 million shares.
That would leave it with an estimated 186 million shares. Those would have to sell for around US$76 each for the government to break even, more than double the current trading price. GM shares closed Tuesday up 52 cents, or 1.4 per cent, at US$37 as the markets rallied on Syria’s decision to give up its chemical weapons.
In January, the Treasury announced a plan to sell the shares by early next year and said that it hired JPMorgan Securities and Citigroup Global Markets to conduct the sale.
When the government finally sells all of its shares, it will end a sad chapter in GM’s history. The company nearly ran out of cash in 2008 and needed government money to survive a trip through bankruptcy reorganisation. Since then GM has posted 14 straight profitable quarters