US in rush to sell off GM stake: report
NEW YORK — The United States plans to sell off much of its remaining shares in General Motors this summer despite the lackluster performance of the company’s stock, the Wall Street Journal has reported.
The newspaper said the sale within the next six months would “almost certainly” mean that US taxpayers would take a loss from a politically controversial $50 billion rescue of the auto giant in 2009.
The government would need to sell its roughly 500 million shares for $53 dollars each in order to break even, but GM’s stock is currently hovering around 30 dollars per share, the newspaper said.
At the current price, the government would lose more than $11 billion, but the Obama administration is willing to accept the loss in order to cut its last ties to the auto manufacturer, the newspaper said, citing unnamed sources.
The summer sale would make it more likely that the government could unload the remainder of its shares before the 2012 election season, it said.
It said GM would also back the sell-off because it would lift restrictions on executive pay that remain in place as long as the government is part owner.
Marking its successful emergence from bankruptcy in July 2009, GM raised $23.1 billion last November in the largest public offering in history.
It posted a 9.6 percent increase in US auto sales in March, but it has also been hit by rising gas prices and its stock has suffered since the exit last month of chief financial officer Chris Liddell, a key architect of the revival.