General Motors announced today that it will be buying 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 move also goes hand-in-hand with the United States Treasury’s plan to fully exit its entire holdings of GM stock within 12 to 15 months, subject to market conditions. The Treasury plans to begin its disposition of its remaining shares as soon as January 2013
“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.
The repurchase price of $27.50 per share represents a 7.9 percent premium over the closing price on December 18, 2012.
“A fortress balance sheet has been a pillar of GM’s financial strategy and has enabled us to undertake today’s actions,” said Dan Ammann, senior vice president and CFO. “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.”
– By: Omar Rana