Treasury and VEBA Close to Selling 50 Million GM Shares image

The US Treasury announced it plans to sell 30-million GM shares in a new IPO in conjunction with the company’s return to the S&P 500 index.

The UAW Retiree Medical Benefits Trust, VEBA, which owns 14% of GM, will also take part by offering for sale 20 million shares, which means that the total offering will reach 50 million shares, or 12% of the Treasury’s GM stock. This means that the Treasury will exit the automaker this year, instead of the previous target of March 2014.

GM’s return to the S&P 500 index has increased demand for the automaker’s shares and the stock has almost reached the highest level since February 2011. During the first three months of this year the Treasury sold almost 20% of the rest of GM’s shares, from the total of 60.8% it initially took after the $49.5 billion bailout.

The Treasury currently owns 16.4% of GM or 241.7 million shares, after in December the US automaker has bought 200 million of its own shares for $5.5 billion. The Treasury managed to get back $30.6 billion of the bailout, but at the current trading prices it will lose around $10 billion.

“We appreciate the opportunity to assist in this offering made possible by our rejoining the S&P 500,” said Dan Ammann, GM senior vice president and chief financial officer. “Our focus remains on continuing the progress we are making in the marketplace with world-class cars, trucks and crossovers.”

Source: The Detroit News