The Treasury Department plans to sell its stake in GM in the following 15 months.
The news comes only one week after the Obama administration sold its stake in the American International Group, which is among the most controversial rescues of the market crisis. According to the Departments’ declaration made today, December 19th, a little less than half of the stake (200 million shares) will be sold to GM for $5.5 billion by the end of this year, a price 8% higher than the automaker’s closing price on Tuesday. The rest of 300.1 million shares will be sold in the following 15 months, according to the market conditions, through stock offerings or other means.
“This announcement is an important step in bringing closure to the successful auto industry rescue, it further removes the perception of government ownership of G.M. among customers, and it demonstrates confidence in G.M.’s progress and our future,” said GM CEO Dan Akerson.
The Obama administration invested $49.5 billion in GM to help the automaker survive amid the economic downturn in 2009 and avoid bankruptcy. In late 2010 GM emerged as a public company, but the Obama administration emphasized the need to restore the automaker as a fully private enterprise, as the taxpayer-financed bailout would affect the company’s ability to compete in the market place.