GM has purchased back from the government its holding of preferred stock in the company for $2.1 billion. The purchase brings the total amount repaid to taxpayers to $23.1 billion, after $13.5 billion recovered from the IPO and $6.7 billion in GM debt repayments and $800 million from interest and dividends. The government invested a total of $49.5 billion in GM in 2009.
The preferred stock transaction was recorded at a price of $25.50 a share, which was agreed upon back in October. Following the transaction, the government’s stake in GM is valued at $16.88 billion assuming a market price of $33.75 per share. GM would have to trade at nearly $53 per share for the government to break even on its remaining stock.
After all is said and done, the TARP program, which authorized up to $700 billion in funds to be used to prevent the economy from collapsing, will have cost the government approximately $30 billion.
GM said it will provide an update of its balance sheet, including current assets, liabilities, pension funding status and post-IPO ownership structure when it files its 2010 Form 10-K in early 2011.
– By: Stephen Calogera