Photo: GM
General Motors has just revealed that it will be buying back some 200 million shares from the US Treasury Department. The shares themselves are GM’s very own, and will be bought back at $27.50 per share, which through some very simple maths leads us to the final figure of $5.5- or €4.13- billion.
The US Treasury holds some 500 million shares in total, so they will still be left with 300 million shares, which equate to roughly a 19% stake. The rest of the shares will be sold off through other means in the coming months, as the US Government begins its quest to rid itself of GM altogether - an action which is set to be completed within the next 12 to 15 months.
Treasury officials say that they invested a total of $49.5 billion in 2008 and 2009, to get control of GM, and following the latest news, they have regained more than $28.7 billion. Still, the deal could have been sweeter, as the break-even point is usually set around the $50 per share price, yet the price they ended up with now still benefits both parties.
Treasury officials say that they invested a total of $49.5 billion in 2008 and 2009, to get control of GM, and following the latest news, they have regained more than $28.7 billion. Still, the deal could have been sweeter, as the break-even point is usually set around the $50 per share price, yet the price they ended up with now still benefits both parties.
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