U.S. Treasury cuts stake in GM to 7.3 percent
(Reuters) - The U.S. Treasury has sold another block of shares in General Motors Co (GM.N: Quote), reducing its stake to 7.3 percent as it moves toward exiting its holdings in the automaker by the end of March.
The Treasury sold more than 110 million shares between May 6 and September 13, raising more than $3.82 billion, according to documents posted online on Tuesday. The Treasury confirmed its stake in the No. 1 U.S. automaker now stands at 101 million shares.
The U.S. government, which originally took a 60.8 percent stake in GM as part of its $49.5 billion bailout of the company in 2009, said it had recovered about $35.4 billion of its investment. When it outlined its exit plan in December 2012, Treasury said it would sell all its GM shares in 12 to 15 months.
"We remain on track to complete our exit from GM by early next year at a cost far less than originally projected," Treasury Assistant Secretary Timothy Massad said in a statement.
GM shares closed Tuesday at $36.71 on the New York Stock Exchange, so Treasury's remaining stake is worth about $3.7 billion. At that price, Treasury would end up losing about $10 billion on the bailout of GM.
Treasury officials have said the government will lose $15 billion on the $85 billion auto industry bailout that included Chrysler, but the intention was to save jobs, not make a profit.
"Treasury acted to save the American auto industry and prevent the loss of an estimated one million jobs," Massad said.
The U.S. taxpayer bailout led some critics to call the company "Government Motors" and executives said the stigma hurt sales some. GM Chief Executive Dan Akerson has said the exit of Treasury would bring closure to the bailout and remove the perception of government ownership among customers.
Analysts have speculated that once Treasury has fully exited its GM stake, the automaker may consider reinstating a dividend on common shares, something it has not paid since May 2008. GM executives have said they will focus on reinvesting in company operations. Continued...