The Globe and Mail reports on the U.S. government announcing its intent to sell all GM stock by year-end. (Note: Thank you to the Canadian American Business Council’s excellent newsletter for alerting BTB to the news.)
That sent the shares up 42 cents (U.S.) in trading on the New York Stock Exchange, a $47.3-million windfall for Ottawa and Ontario, which still hold 110.1 million GM shares or about 8 per cent of the auto maker’s shares outstanding.
The government ownership led to the company being derided as “Government Motors” when it emerged from Chapter 11 bankruptcy protection, and is believed to have hurt vehicle sales and the company’s share price and delayed a full recovery from the near-death crisis that GM has overcome.
The elimination of U.S. government ownership should help increase U.S. vehicle sales, GM North America president Mark Reuss told reporters Thursday at the Los Angeles Auto Show.
They (U.S. and Canadian governments) still hold $403-million worth of preferred shares. The remaining 110.1 million common shares were worth $4.2-billion as of the close of trading Thursday.
That means the implied debt remaining is about $2.4-billion (Canadian), requiring about another $21 a share advance for the Canadian taxpayers to break even.