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Treasury to unload another tranche of GM stake
The U.S. Treasury Department is slowly winding down its stake in General Motors (NYSE: GM) with the sale of 30 million shares timed to coincide with the automaker’s return to the S&P 500.
The biggest of the Detroit car cohort is set to nudge H.J. Heinz Company (NYSE:HNZ) from the index at the market’s close on Thursday.
After this public offering, the Treasury will reduce its GM holdings to 211.7 million shares. The move follows GM’s repurchase of 200 million shares from the Treasury in December, when it had announced its intention to eliminate its entire stake in 12 to 15 months.
The UAW Retiree Medical Benefits Trust will join the Treasury and sell 20 million shares, bringing the total offering to 50 million shares.
The Treasury is attempting to chip away at the Troubled Asset Relief Program, established during the financial crisis to strip bad assets from the balance sheets of struggling companies.
So far, the Treasury says it has recovered about 95 per cent, or $398.15 billion, of the total $419.97 billion that it disbursed.
Both the re-listing on the S&P 500 and the stock buyback are signs of GM’s gradual recovery from the nadir, when it sank into the hands of the U.S. and Canadian governments. The company last traded on the index four years ago.
H.J. Heinz’s exit comes as Berkshire Hathaway‘s (NYSE: BRK.B) deal to take the company private closes.
GM is trading nine cents higher at $35.05 as of 9:56 am ET.
Story by ProactiveInvestors
Source: http://www.proactiveinvestors.com/companies/news/44677/treasury-to-unload-another-tranche-of-gm-stake-44677.html
