THE US government took a step closer to fully privatising car maker GM yesterday, announcing plans to sell the rest of its stake in the business.
The announcement comes six months after the US state sold its final shares in bailed-out insurer AIG and is another move towards fully unwinding the purchases made in the financial crisis.
The planned sale contrasts with progress in the UK where the government still owns most of RBS and 39 per cent of Lloyds Banking Group. Here the government hopes to sell its stake in Lloyds and begin to privatise RBS only by the end of 2014 at best.
GM was bailed out in 2008 and 2009 under the Troubled Asset Relief Programme (TARP) in an effort to save jobs at the bankrupt manufacturer.
Since then it has mockingly been called Government Motors, instead of its original General Motors,
Almost $50bn (£32.2bn) was sunk into the firm, giving the government a stake of around 60 per cent at its peak.
Roughly $30bn has been recouped so far as parts of the stake have been sold, leaving the government with 18 per cent of the company.
At today’s prices the remaining 241.7m shares are worth $7.7bn, meaning the US is unlikely to regain the full bailout amount.
“We are pleased with the progress to date and will continue exiting this investment in accordance with our previously announced plan and timetable, and in a manner that maximizes returns for taxpayers,” said US Treasury official Tim Massad.