GM to Buy Back $2.1 Billion in Government Shares

After the proposed sale the government will still own 60.8% of the company's primary common equity.

As the government moves to offload its massive stake in the auto giant, General Motors will buy back $2.1 billion worth of its shares from the Treasury Department, officials announced on Oct. 28.

GM will buy back all preferred stock issued under the Trouble Asset Relief Program, which saw GM bailed out to the tune of $50 billion at the height of the economic crisis.

So far the company has paid back around $7.4 billion in loans since it emerged from bankruptcy in July 2009, but the government retains controlling interest in the firm.

After the proposed sale the government will still own 60.8% of the company's primary common equity.

The share deal will not be activated until GM relists on the stock exchange.

No details have been made available about the date of the initial public offering, the number of shares to be offered or their prices, but the IPO could be among the largest in U.S. history.

The Treasury Department has said it will take place in the fourth quarter, and industry experts expect it to come after the mid-term elections.

Copyright Agence France-Presse, 2010

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