Jan. 19--WASHINGTON -- The Obama administration took the next step Friday to end its ownership of General Motors, initiating a plan to sell its remaining 300.1 million shares of the automaker.
Last month, the U.S. Treasury sold 200 million shares of common stock back to GM for $5.5 billion and announced its plan to sell the remainder by April 2014. As of now, the government owns a 19% stake in the company.
Treasury this week announced that it had selected JPMorgan Securities and Citigroup Global Markets to manage the sale.
The administration converted much of the $49.5 billion it provided to the automaker to equity, or stock, when GM emerged from its bankruptcy restructuring in July 2009.
It's still not known how much the investment will end up costing taxpayers. GM paid $27.50 each for the 200 million shares last month. If the remaining shares were sold at that price, it would still mean a $12.6-billion loss on the GM investment.
But GM shares have been trading above that mark recently -- they closed at $29.28 Friday.
Obama administration officials have been saying for months -- especially through last year's presidential campaign -- that even if the government lost money, it was worth it to save as many as a million jobs directly or indirectly linked to the auto industry.
Treasury, repeating its earlier statements, said it would sell the shares "in an orderly fashion" to avoid disrupting the market.
That is, the government is likely to sell the shares on a continuous basis throughout the rest of the year so they don't all hit the market at one time, which could drive down the price.
Investors have cheered the government's decision to sell. GM leaders are glad to put the "Government Motors" era behind them.
"This part of our history is closed," GM CEO Dan Akerson said last week. "This company will always feel a debt of gratitude to the American and Canadian taxpayers for stepping in."
The Treasury Department said in a statement that "there will be opportunities for smaller broker dealers, including women and minority-owned broker dealers, to participate in the sale of Treasury's remaining GM common shares pursuant to the plan."
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