Washington expects to sell remainder of GM stock by year's end
Treasury Department said in statement it still owns 31.1 million shares of auto giant
DETROIT—The United States government said it expects to sell its remaining stock in General Motors by the end of the year.
The Treasury Department said in a statement that it still owns 31.1 million shares of the auto giant and has recovered US$38.4-billion of the US$49.5-billion it spent bailing out the company.
At the Nov. 20 closing price of US$37.69, the treasury would get an additional US$1.2-billion.
That means taxpayers will lose roughly US$10-billion on the bailout.
The government said the bailout was needed five years ago to save the American auto industry and more than a million jobs.
It got 912 million shares, or a 61 per cent stake in GM, in exchange for the bailout.
Treasury gradually has sold off its stake since a November 2010 initial public offering.
GM released a statement soon after the Treasury Department announcement saying its “work to transform GM continues.
“We’re making great progress in our efforts to make the most of this second chance by building outstanding cars and trucks, creating jobs and reinvesting in our country,” the GM statement read.
The Canadian and Ontario governments said in September they had sold a block of 30 million shares in GM valued at about $1.1-billion, but still continued to hold more than 119 million GM common shares and 16.1 million GM series A preferred stock through a federal agency.
Both Ottawa and the Ontario government acquired GM shares in 2009 after providing $10.6-billion in aid to bail the automaker out amid a recession that hit the auto industry particularly hard.
The investment is held on behalf of the two governments by Canada GEN Investment Corp., a subsidiary of the Canada Development Investment Corp.
Federal Finance Minister Jim Flaherty said in September that Ottawa was committed to selling its remaining ownership of GM as quickly as possible.
Ontario’s portion of the remaining stock amounts to about 36.7 million GM common shares and 5.4 million series A preferred Stock.
—With files from Canadian Manufacturing Daily Staff