General Motors Co. will purchase $5.5 billion of its stock from the U.S. Treasury, moving the government a step closer to ending the controversial bailout of the auto industry.
GM will buy 200 million shares for $27.50 each, a 7.9 percent premium over yesterday’s closing price, the automaker said today. Treasury will still hold about 300 million shares, or 19 percent on a fully diluted basis, after the transaction and plans to sell its entire holding within 15 months, GM said.
The bailouts of GM and Chrysler Group LLC by U.S. and Canadian governments propped up an industry that has since reported three straight years of at least 10 percent growth. GM received $49.5 billion from the U.S. in 2008 and 2009 as part of its restructuring, Treasury said today. Taxpayers still owned 32 percent of the company before today.