The US Treasury announced that the estimated losses for the $85 billion auto bailout dropped 16% or $4 billion mainly because GM’s stock price began to rebound.
The Obama administration recently announced that the estimated auto losses fell to $20.3 billion fro the previous forecast of $24.3 billion. In 2009, the US Treasury expected to lose $44 billion on its bailout of GM, Chrysler and their financing arms, but that forecast dropped to $30 billion at the end of 2009 and to $14.3 billion in 2011.
Two months ago the Treasury sold 200 million shares from the total of 500 million shares in GM for $5.5 billion, therefore reducing its holdings in the US automaker to 19%. As the sale was below the break-even price, the Treasury now needs to sell the rest of the stake with the average price of $70 a share to break even.
The Treasury allocated $484 billion for the Troubled Asset Relief Program and it expects total losses of $55.5 billion, a decrease from $59.7 billion its most recent estimate. Yesterday, GM stock closed at $28.53 a share, down 4 cents. The Treasury managed to exit Chrysler after its $12.5 billion bailout, existing Ally Financial has been delayed with 18 months and the exit from GM is expected to be finalized by March 2014.
by Ana Cezara Savin
) - Tuesday, February 12th, 2013 - filed under General Motors
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