WASHINGTON -- The Treasury Department said today it will begin another round of sales of the General Motors Co stock it acquired during the government's bailout of the U.S. auto sector.
The move follows a registration statement by GM last month making it easier for the Treasury to sell its remaining 241.7 million shares, or nearly 18 percent, of common stock of the No. 1 U.S. automaker.
It also will bring GM a step closer to eliminating the stigma of government ownership.
GM executives have chafed under the tag of “Government Motors” since its 2009 government-sponsored bailout and bankruptcy that left the U.S. Treasury with 60.8 percent ownership of the Detroit automaker.
After GM's November 2010 IPO, the Treasury's share of GM's common stock fell to 32 percent. Last week, GM came within 56 cents of its IPO price of $33 after it reported better-than-expected first-quarter earnings.
“We are pleased with the progress to date and will continue exiting this investment in accordance with our previously announced plan and timetable, and in a manner that maximizes returns for taxpayers,” Tim Massad, Treasury assistant secretary for financial stability, said in a statement.
In December, the Treasury said it would fully exit its GM investments within the following 12 to 15 months, “subject to market conditions.” But it gave no specific dates for the resumption of share offerings.
Also in December, GM repurchased 200 million shares of its common stock from the Treasury. At the time, Treasury said the sale was for $5.5 billion.
By the end of March, the U.S. government had recovered $30.4 billion of the $49.5 billion used to bail out GM under the Troubled Asset Relief Program, the TARP special paymaster said recently.
It is unlikely that the taxpayers will be fully repaid for the TARP bailout as Treasury exits. Treasury officials have said the goal was not to turn a profit on owning GM shares, but rather to save U.S. jobs.
Executives at GM have said that putting this issue behind them will improve the company's image and boost sales as they believe some consumers have held the bailout against them.
GM offered no fresh comment to the Treasury move on Monday. A spokesman said the company stood by the comments of Chief Executive Dan Akerson from last December.
Akerson at the time said Treasury's move to exit GM ownership “is an important step in bringing closure to the successful auto industry rescue,” and “further removes the perception of government ownership.”
The automaker's shares were not much moved by the news. On Monday afternoon, GM shares were up 1 cent at $32.11 on the New York Stock Exchange.
While Treasury now owns nearly 18 percent of GM shares of common stock, its ownership is about 16.4 percent of GM's diluted shares.
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