The U.S. Treasury Department will wait for General Motors Co. (GM)’s first-quarter earnings before deciding whether to sell more of its investment in the nation’s largest automaker, a person familiar with the matter said.
The government will be required to sell its remaining 500 million shares at $53 apiece in order to save U.S. taxpayers to take a loss on their $50 billion rescue of the Detroit auto maker in 2009.
The Treasury is unable to sell its holdings before May 22, due to a condition of the $23.1 billion IPO, which took place in November and reduced the U.S. government’s stake in GM from 61% to 26.5%.
No decisions have been made as to the timing or size of such a sale, two people said.
“Planning for the sale of our remaining GM stock is still at an early stage, and the IPO lock-up does not expire until late May,” a Treasury spokesperson said. “At that point, we will consider all of our options, based on our twin goals of protecting taxpayers’ interests and exiting as soon as practicable.”
Sources have previously told Reuters that a follow-on share sale could be worth about $10 billion — but since GM shares have dropped below their $33 IPO price, some have suggested that the sale could be smaller.
GM’s shares are now at their lowest since their IPO. They closed at $29.97, or 9.2 percent below the IPO price on the New York Stock Exchange on Monday.