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GM pays U.S. Treasury $2.1 billion for preferred shares


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GM pays U.S. Treasury $2.1 billion for preferred shares

December 15, 2010 - 2:46 pm ET

WASHINGTON (Reuters) -- General Motors Co. has completed the buyback of the government's holdings of GM preferred stock issued in the automaker's bailout for $2.1 billion, the U.S. Treasury Department said today.

The repurchase brings GM's total repayments to U.S. taxpayers to $23.1 billion, including $13.5 billion received from the automaker's initial public offering last month, the Treasury said.

The government has invested a total of about $49.5 billion in GM, which was steered through a government-sponsored bankruptcy in 2009.

The GM Series A preferred stock buyback, agreed in October at $25.50 a share, reduces the Treasury's holdings in GM to about 500 million shares of GM common stock, or around a 33 percent stake.

As of this afternoon, that stake would be worth about $16.88 billio

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20101215/OEM/312159944/1424#ixzz18DsoQcki

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GM buys $2.1B in preferred stock from government

David Shepardson / Detroit News Washington Bureau

Washington— General Motors Co. repurchased $2.1 billion in preferred stock held by the Treasury Department Wednesday, bringing GM's repayments to $23.1 billion.

The government still holds 500.1 million shares, or 33 percent of GM. At current prices, the government is set to lose nearly $10 billion of its $49.5 billion GM bailout.

The bailout taxpayers made in GM "was vital to preventing a devastating collapse of the auto industry and saving more than a million jobs," said Tim Massad, the Treasury's acting assistant secretary for financial stability.

"As we continue to exit GM, we're also continuing to receive significant repayments of the taxpayers' investment."The Treasury Department received $13.5 billion from the sale of nearly half of its GM stake in last month's initial public stock offering. GM previously repaid $6.7 billion and $800 million in interest payments.

"What's already clear is that turning around GM was the right decision for the economy, for the future of the American manufacturing industry, and the jobs of millions of Americans," Massad said.

From The Detroit News: http://detnews.com/article/20101215/AUTO01/12150415/GM-buys-$2.1B-in-preferred-stock-from-government#ixzz18E3DtD1W

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GM Repays Another $2.1 Billion To Treasury

Brings IPO payback to $23 billion.

by Paul A. Eisenstein on Dec.16, 2010

The General sends a $2.1 bil check to DC.

Taxpayers have just received another $2.1 billion check from General Motors, bringing to more than $23 billion the amount the once-bankrupt maker has repaid to taxpayers for last year’s government bailout.

That still covers less than half of the government’s $49.5 billion investment, however, and it remains to be seen how much of the rest will be recovered by the Treasury.

GM sold off a bit more than a half of the federal government’s 60% stake as part of last month’s initial public offering. But the maker and its White House partners are hoping that subsequent share offerings will command a yet-higher price.

Though the bailout has continued to be controversial, surveys show that more Americans now support than oppose the government’s efforts to save the failing maker, which plunged into Chapter 11 protection in May 2009 and emerged two months later minus billions of dollars in debt.

The bailout “was essential to preventing a devastating collapse of the American auto industry and saving more than 1 million American jobs,” the Treasury’s acting assistant secretary for financial stability, Tim Massad, said in a statement.

The latest repayment comes as GM repurchases preferred shares issued under the Troubled Asset Relief Program. As a result of a stock split that heralded the November IPO, the government now holds just over 500 million shares of General Motors stock.

The company saw its stock slip to $33.61 at the close of Wednesday trading. That’s up about 2% from the IPO strike price of $33 a share, but down from a post-offering high that approached $35.

The IPO and subsequent overage raised $23.1 billion, making the automaker’s return to public trading the largest initial public offering in American business history.



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