Christy Romero, special inspector general for the Troubled Asset Relief Program, has a plan for the US government to help GM and Ally.
Currently the Treasury owns 74% stake in Ally and 26.5% in GM, three years after the government’s auto bailout. The government plans to sell its shares even below break-even prices.
“Market conditions have slowed Treasury’s progress. In addition, due to the enormity of Treasury’s stake, it could take a number of years for Treasury to sell at or above break-even,” Christy Romero, special inspector general for the Troubled Asset Relief Program.
The government says it already has a plan and the Treasury waits for the right moment to sell the shares. Each share from the total of 500 million should be sold at $52 each so that the government would recoup the remainder of its initial $50 billion investment.
On the other hand, Ally Financial, the other troubled company, paid back $5.4 billion of its TARP loan and filed IPO paperwork in 2011. Still there is no information on when it plans to pay off the rest of the funds. Treasury suggested GM to buy back Ally, but the company hasn’t showed any desire to comply with this plan.