The U.S. Treasury is fast-tracking its plans to sell off its remaining shares of General Motors to be completely divested by the end of this year. The government currently has 31.1 million shares remaining after recently selling 70.2 million shares for $2.56 billion, the Treasury Department said.
“If average daily trading volumes continue at recent levels, Treasury anticipates that it will complete the sale of its remaining shares by the end of the year. However, that schedule remains subject to market conditions,” the Treasury said in a statement.
The government is likely to lose more than $10 billion. Treasury has already booked a loss of $9.7 billion on the sale of about 800 million shares of its stake.
Once the last shares are sold, GM will be entirely in charge of the company and would be able to do some things it has not before then, such as pay a dividend and be free of pay restrictions on its executives.
“While the U.S. Treasury’s equity stake draws to a close, our work to transform GM continues,” the company said in a statement. “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 U.S. government provided GM as $49.5 bailout package, which included a $6.7 billion loan and a 60.8% ownership stake in the post-bankruptcy company. GM repaid the loan and the Treasury Department has been selling off its stock during the last few years. However, about 18 months ago, it announced it would attempt to divest its shares by the end of the first quarter of 2014.
(U.S. Treasury continues sell off of GM stock. For more, Click Here.)
“Treasury’s investment in the American auto industry was part of President Obama’s broader response to the financial crisis, and it helped save more than 1 million jobs,” Treasury Deputy Assistant Secretary Tim Bowler said.
(Click Here to read about concerns over GM marketshare.)
“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. Our actions have enabled the industry to rebound.”
The Treasury also rescued Chrysler Group with a $12.5-billion bailout. The Treasury closed the books on that rescue in 2011 and took about a $1.3-billion loss.