• Sign in to follow this  
    Followers 0

    GM Buying 200 Million Shares From The Treasury



    William Maley

    Staff Writer - CheersandGears.com

    December 19, 2012

    General Motors announced today that they will be buying back 200 million shares of stock from the U.S. Treasury. The buyback will cost GM about $27.50 per share - about $5.5 billion in total.

    GM says the $27.50 share price represents a 7.9% premium over the closing price on December 18. The share buyback is expected to close by the end of December.

    After this buyback, the Treasury will still hold close to 300 million shares of the automaker's stock – roughly equal to a 19% stake. Treasury officials say they will begin to sell off the rest of their shares as early as next month, "through various means and in an orderly fashion." The Treasury plans to sell all of its GM shares over the next 12 to 15 months.

    “This announcement is an important step in bringing closure to the successful auto industry rescue, it further removes the perception of government ownership of GM among customers, and it demonstrates confidence in GM’s progress and our future,” said Dan Akerson, chairman and CEO of GM in a press release today.

    Source: GM, U.S. Treasury

    William Maley is a staff writer for Cheers & Gears. He can be reached at william.maley@cheersandgears.comor you can follow him on twitter at @realmudmonster.

    Press Release is on Page 2


    GM to Buy Back Stock from U.S. Treasury Department

    U.S. intends to fully exit GM investment within 12-15 months

    2012-12-19

    DETROIT - General Motors today said it will purchase 200 million shares of GM common stock held by the U.S. Department of the Treasury for $5.5 billion, or $27.50 per share. The share buyback is part of the Treasury’s plan, also announced today, to fully exit its entire holdings of GM stock within 12 to 15 months, subject to market conditions.

    Treasury has announced its intention to sell its remaining shares of common stock into the market through various means and in an orderly fashion. Treasury intends to begin its disposition of its remaining shares as soon as January 2013, consistent with a pre-arranged written trading plan. In addition, Treasury has agreed to relinquish certain governance rights that were included in the U.S. Treasury Secured Credit Agreement with GM.

    “This announcement is an important step in bringing closure to the successful auto industry rescue, it further removes the perception of government ownership of GM among customers, and it demonstrates confidence in GM’s progress and our future,” said Dan Akerson, chairman and CEO of GM.

    Dan Ammann, senior vice president and CFO added, “A fortress balance sheet has been a pillar of GM’s financial strategy and has enabled us to undertake today’s actions. GM’s balance sheet will remain very strong, with estimated liquidity of approximately $38 billion at the end of 2012, following the closing of the share buyback.”

    The repurchase price of $27.50 per share represents a 7.9 percent premium over the closing price on December 18, 2012. The share buyback is expected to close by the end of the year. This transaction will be accretive to earnings per share, as GM’s total shares outstanding on a fully diluted basis will be reduced by approximately 11 percent. In association with this share buyback, GM expects to take a charge of approximately $400 million in the fourth quarter, which will be treated as a special item.

    After the repurchase, Treasury will continue to own approximately 300 million shares of GM common stock, or approximately 19 percent of the outstanding shares on a fully diluted basis. Government ownership of GM stock was the result of the auto industry rescue that began under President George W. Bush in 2008 and which was expanded by President Barack Obama in 2009.

    The industry in general, and GM in particular, have rebounded sharply since the rescue. Since the rescue, GM has announced investments of more than $7.3 billion in the U.S. and created or retained more than 20,000 jobs.

    “We come to work every day grateful that taxpayers from the US and Canada stepped forward to rescue our industry, and determined to show this extraordinary help was worth it,” Akerson said.

    0


      Report Article
    Sign in to follow this  
    Followers 0


    User Feedback




    Your content will need to be approved by a moderator

    Guest
    You are commenting as a guest. If you have an account, please sign in.
    Add a comment...

    ×   You have pasted content with formatting.   Remove formatting

    ×   Your link has been automatically embedded.   Display as a link instead

    Loading...



  • Popular Stories

  • Today's Birthdays

    1. Raybob9289
      Raybob9289
      (50 years old)
    2. Z06C6Vette
      Z06C6Vette
      (28 years old)
  • Similar Content

    • By William Maley
      The tentative agreement between General Motors and Canadian union Unifor has a $400 million investment going to Oshawa for a new product. Unifor President Jerry Dias said at a press briefing yesterday morning that Oshawa would be the only GM plant that will build cars and trucks. Neither side is saying what that product might be.
      But Canadian newspaper The Globe and Mail has learned from sources that Oshawa will be handling the final assembly of the Chevrolet Silverado and GMC Sierra. Truck bodies from GM's Fort Wayne Assembly in Indiana will travel to Oshawa to have interiors installed and final assembly. The Detroit News reports something similar, although their source says it will only be the Silverado.
      Oshawa has a history of building pickups. For four decades, Oshawa was one of the places where GM built the Silverado and Sierra. But in 2009, GM closed the truck plant due to the recession. 
      The Globe and Mail also reports that production of the XTS has been extended at Oshawa. Analysts believed previously that XTS production would end in 2019.
      Source: The Globe and Mail, The Detroit News

      View full article
    • By William Maley
      The tentative agreement between General Motors and Canadian union Unifor has a $400 million investment going to Oshawa for a new product. Unifor President Jerry Dias said at a press briefing yesterday morning that Oshawa would be the only GM plant that will build cars and trucks. Neither side is saying what that product might be.
      But Canadian newspaper The Globe and Mail has learned from sources that Oshawa will be handling the final assembly of the Chevrolet Silverado and GMC Sierra. Truck bodies from GM's Fort Wayne Assembly in Indiana will travel to Oshawa to have interiors installed and final assembly. The Detroit News reports something similar, although their source says it will only be the Silverado.
      Oshawa has a history of building pickups. For four decades, Oshawa was one of the places where GM built the Silverado and Sierra. But in 2009, GM closed the truck plant due to the recession. 
      The Globe and Mail also reports that production of the XTS has been extended at Oshawa. Analysts believed previously that XTS production would end in 2019.
      Source: The Globe and Mail, The Detroit News
    • By William Maley
      It came down to the wire, but a tentative deal between General Motors and Canadian union Unifor was reached before the midnight deadline. 
      “Did we achieve our objective? I would suggest the answer is clearly yes,” said Unifor President Jerry Dias during a press conference this morning.
      “We have found a solution for your facilities. To say this is a difficult set of negotiations is an incredible understatement."
      In a statement released by GM, the tentative agreement will bring wage increases to the 3,860 workers and introduce new investments and products to the Oshawa and St. Catharines plants. Oshawa was a key focus for Unifor as GM didn't have any plans for the plant after 2018. 
      For St. Catharines, GM will move some engine production from Mexico to the plant. A source tells The Detroit News the plant will also continue building the 3.6L V6 and add some transmission work. Oshawa was the big winner as GM will be investing millions into the plant to make it the only GM plant that will build cars and trucks. GM and Unifor aren't saying what the products will be. 
      “It’s a total win for Jerry Dias and Unifor. They got everything they were looking to get going into the talks; every box right now is checked,” said Tony Faria, professor emeritus, office of automotive and vehicle research at the University of Windsor’s Odette School of Business.
      Source: Automotive News (Subscription Required), The Detroit News, 2, GM
      Press Release is on Page 2


      General Motors of Canada Media Statement
      OSHAWA, ON, September 20, 2016 — General Motors of Canada and Unifor have reached a tentative new collective agreement, covering approximately 3,860 represented employees at just after midnight on September 20th 2016.  The agreement will enable significant new product, technology and process investments at GM’s Oshawa, St. Catharines and Woodstock facilities, placing those operations at the forefront of advanced manufacturing flexibility, innovation and environmental sustainability.  This agreement is subject to member ratification.  We will be working with government on potential support, and will provide further details on the investment at the appropriate time, while respecting Unifor’s ratification process.

      View full article
  • Recent Status Updates

  • Who's Online (See full list)