U.S. sells more GM stock, likely to lose about $10B on bailout once all stock is sold
by Tom Krisher THE ASSOCIATED PRESS
To break even, the remaining shares would have to sell for nearly $140 each. Trading price as of press time was US$36.92
NEW YORK—The U.S. government is starting another phase of selling off its General Motors stock after cutting its stake in the automaker to just over seven per cent.
The Treasury Department says it still owns 101.3 million GM shares but plans to sell all of its shares by April 1.
It got 912 million shares, a 60.8 per cent stake in the company, in exchange for a $49.5 billion bailout of GM in 2009. So far, about $35.4 billion has been recovered for American taxpayers.
To break even, the remaining shares would have to sell for nearly $140 each. At the Thursday morning trading price of US$36.92, the government would get about $3.7 billion—losing the U.S. government around $10 billion on the deal.
The Canadian federal government and province of Ontario recently announced they had sold a block of 30 million shares valued at about $1.1 billion. They continued to own more than 119 million GM common shares and 16.1 million preferred shares but have said the stock will be sold at some point.
The bailouts were authorized during the financial crisis in 2008 and 2009. At the time GM’s sales had plummeted and it nearly ran out of cash to make payroll and service billions of dollars in debt.
The governments said at the time that the bailout was necessary to save the American and Canadian auto industries. The Obama administration says bailing out GM and Chrysler saved more than a million American jobs.
The Treasury Department said it finished the second phase of selling GM stock on Sept. 13.
