THE US Treasury yesterday announced plans to sell 30m shares in General Motors as part of its ongoing effort to wind down the government’s stake in the bailed-out carmaker.
The Treasury said it would sell the shares in a public offering in conjunction with the company’s inclusion to the Standard & Poor’s 500 index on June 6, which should help spur demand for the stock.
The offering will take place along with the sale of 20m shares of GM stock held by the UAW Retiree Medical Benefits Trust, bringing the total size of the sale to 50m shares, it said.
The exit of Treasury also will eliminate the stigma of government ownership – some critics dubbed the company “Government Motors” – that GM executives said has hurt sales.
The US government, which initially took a 60.8 per cent stake in the US’s top carmaker as part of its $49.5bn (£32.1bn) bailout, had said it planned to sell its remaining shares by April 2014. Some analysts said Treasury could even unwind its position by year end.
“This could open the door for additional capital actions including a potential dividend," RBC capital markets analyst Joseph Spak said in a research note.
GM is scheduled to host its annual shareholders meeting in Detroit today.
City A.M. Reporter