US Treasury to sell remaining GM stakes by end of 2013

Article by Anita Panait, on November 22, 2013

The United States Treasury Department expects to sell its remaining shares at General Motors Co. by the end of the year. According to the Treasury, the final GM share sale would occur by year-end, subject to market conditions and if average daily trading volumes continue at recent levels. Treasury said it already had sold 70.2 million shares of GM stock and to date had recovered $38.4 billion from the $49.5 billion used to bail out the carmaker years ago.

At current prices, Treasury could recover another $1.2 billion from its remaining stake at GM, pegged at 31.1 million shares. That would bring the total recouped amount to $39.6 billion, which is around $10 billion short of the bailout amount. Treasury remarked that its initial cost basis for the GM shares was $43.52 per share.

The carmaker announced in December 2012 that it would sell all its stake in GM in at least a year to 15 months – which means that completing the GM stake sale by the end of 2013 is on the earliest end of its target. Despite the shortfall, the Treasury reiterated that their goal in providing the bailout money was never to make a profit, but to save the US auto industry.

Carmakers have posted an 8.4-percent rise in sales in the US in the first 10 months of 2013, full year sales are expected to reach 15.5 million vehicles, which is way above the 10.4 million units sold in 2009. All three Detroit carmakers are now profitable. Most of the profits are driven by large pickup trucks and sports utility vehicles. Sales of such vehicles accounted for over two-third of GM's global pre-tax earnings.

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Topics: us treasury, gm, shares

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