Treasury to Sell Remaining GM Stake by End of 2013
NEW YORK (TheStreet) -- The U.S. Treasury on Thursday announced a plan to sell its remaining stake in General Motors
Shares of General Motors were up 3% in morning trading, to $38.78.
As part of the Troubled Assets Relief Program, or TARP, the government lent $50.7 billion to GM in 2008 and 2009, with most of the debt securities eventually converted to common or preferred shares. GM filed for bankruptcy in June 2009 and emerged from bankruptcy the following month. The "new" General Motors eventually completed an initial public offering in November 2010, raising $20.1 in common equity.
The government has already sold 70.2 million in GM shares, and has "launched a final plan" to shed its remaining 31.1 million shares.
"Had we not acted to support the automotive industry, the cost to the country would have been substantial -- in terms of lost jobs, lost tax revenue, reduced economic production, and other consequences," said Deputy Assistant Treasury Tim Bowler in a press release. "Our actions have enabled the industry to rebound. All three American automakers are now profitable, and more than 340,000 new auto jobs have been created since GM and Chrysler emerged from bankruptcy in 2009," Bowler said.
According to the Treasury, the government has recouped $38.4 billion of its investment in General Motors. The entire TARP program has recovered $431.4 billion, exceeding the total investment of $421.6 billion. The total TARP recovery number includes profits to the Treasury from its sale of shares in American International Group
Shares of General Motors were up 31% year-to-date, through Wednesday's close at $37.69.
Interested in more on General Motors? See TheStreet Ratings' report card for this stock.
-- Written by Philip van Doorn in Jupiter, Fla.
>Contact by Email.