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Treasury Will Sell Remaining GM Shares by End of Year

Government expected to lose more than $10 billion on bailout.

by on Nov.21, 2013

General Motors is about to be completely government-free after the U.S. Treasury announced plans today to sell its remaining 31.1 million shares by Dec. 31.

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.

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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. (more…)

Government Motors No More! Almost

Treasury Department sells off most its remaining shares of General Motors.

by on Oct.29, 2013

The government is in the final phase of getting the Government out of Government Motors.

Government Motors is basically no more, and the final price tag for taxpayers to bailout the automaker is about $9.7 billion.

The U.S. Department of Treasury now owns just 7.3% of the General Motors’ common stock after its most recent stock sell off.

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Taxpayers originally held 60.8% of GM in exchange for the bailout loans. Treasury has been selling down that stake, but ramped up its efforts this year. (more…)

Gunfight Looming Between Politicians, Banks and Treasury at the Chrysler Corral

Secured debt might not be so secure if the government forces bankruptcy or politics intrude.

by on Apr.23, 2009

Is Citibank being a piggy bank in its demands for worthless Chrysler bonds?

Are Citibank and others being piggy banks by demanding too much for worthless Chrysler bonds?

Chrysler LLC’s creditors will have to make a judgment soon on whether they accept an offer to exchange their debt for equity in the company for pennies on the dollar or risk a political showdown over whether to force the company into bankruptcy.

Michigan’s Democratic Governor Jennifer Granholm and the state’s Republican Attorney General in a rare agreement have in recent days characterized the battle over debt and bankruptcy as a struggle between Wall Street and Main Street. Cox has accused Steve Rattner, the head of President Obama’s Auto Task Force of favoring a Wall Street-oriented solution at the expense of small businesses, retirees and workers in Michigan.

Rattner has a New York banking and financial services background, and Rattner himself is under investigation for bribing New York politicians to secure lucrative pension fund management contracts for his firm.

Chrysler’s creditors have proposed forgiving a very small part of their stake in return for as much 40% of the equity in a reorganized Chrysler. In addition, the creditors also are asking Fiat, Chrysler’s potential Italian partner, to invest cash in Chrysler. So far, Treasury has countered with far less cash, about $1 billion, and only 5% of the equity in the re-organized company. Expect this to go back and forth right  down to the deadline. (more…)

U.S. Treasury Department Flatly Rejects Chrysler Debt Proposal from Bondholders

“More constructive position” needed.

by on Apr.22, 2009

Treasury Sec. Tim Geithner has called for sharp concessions by Chrysler lenders.  His department is rejecting a new proposal by debt holders.

Tim Geithner, U.S. Treasury Secretary, is flatly rejecting a new proposal by Chrysler debt holders.

“A more constructive position” is needed on the part of Chrysler LLC’s lenders, the U.S. Treasury Department is saying, in response to a proposal by banks, private equity firms and others who hold $6.9 billion in the automaker’s debt – and who could be the final obstacle to a deal that saves Chrysler from bankruptcy.

Late last month, President Barack Obama gave the flailing automaker 30 days to pull its financial house in order and complete a strategic alliance with its Italian white knight, Fiat SpA, otherwise Chrysler would be forced to file for court protection.  Few believe the U.S. maker would be able to emerge from bankruptcy and would most likely be broken up and sold in pieces.

To meet the White House mandate, and to win over Fiat CEO Sergio Marchione, Chrysler needs to complete a number of steps that include winning new concessions from its workers – both in the U.S. and Canada – and restructuring its heavy debt load.

Negotiators for the various lenders earlier this week proposed a complex agreement that would allow them to continue to hold $4.5 billion in secured debt, give them $1 billion in preferred equity in the new company formed by an alliance with Fiat, and another 40% of that company’s common shares.  Industry sources say the lenders also demanded a $1 billion investment by Fiat which, until now, had expected to gain a 35% or larger stake in Chrysler for no up-front cash. (more…)