GM to Buy Back 200 Million Government Shares
by Ian Smith |
General Motors said Wednesday it will spend $5.5 billion to buy back 200 million shares of its stock from the government.
The U.S. Department of the Treasury in turn announced its intent to fully exit its remaining 300 million in GM stock starting in January, subject to market conditions.
Treasury currently holds 500.1 million shares of GM common stock. Treasury intends to exit that investment through the following means:
- GM said it will purchase 200 million shares of common stock from Treasury at $27.50 per share.
- This transaction is expected to close by the end of the year.
Treasury intends to sell its other remaining 300.1 million shares through various means in an orderly fashion within the next 12-15 months, subject to market conditions. The disposition of the additional 300.1 million common shares will begin as soon as January 2013 pursuant to a pre-arranged written trading plan.
The move may help to boost GM’s share price, however, if the government sells its shares at current prices, taxpayers would lose more than $13 billion.
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