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Treasury gets another $1.8 billion from GM stock

By MARTIN CRUTSINGER – The Associated Press


Washington – The Treasury Department has received another $1.8 billion in net proceeds from the sale of additional stock in General Motors.

Treasury said the revenue received Thursday brought the total amount the government has earned from an initial public offering of General Motors stock to $13.5 billion.

Treasury had said last week it expected to earn another $1.8 billion if the bankers who handled the IPO exercised their full options to purchase an additional 53.8 million shares of GM common stock.

The government put $49.5 billion into GM as part of its bailout of the giant automaker.

As part of the GM stock sales, Treasury received an initial $11.7 billion on Nov. 23 and the additional $1.8 billion on Thursday, bringing the total to $13.5 billion.

That money is deposited in the federal government’s bank account, which is maintained by the Federal Reserve Bank of New York. The GM money shows up as being received in the daily Treasury statement, the government’s accounting of where its balance sheet stands.

The GM funds are listed on the line for the Troubled Asset Relief Program, the name for the $700 billion bailout program.

However, the TARP payments are mixed with the government’s other revenue and are not dedicated to any particular purposes.

The TARP payments are lumped into the government’s total cash operating balance, which on Wednesday stood at $247.4 billion. Interest on this balance is paid to Treasury as part of the earnings the Federal Reserve returns to the government every year.

In announcing the payment Wednesday, Tim Massad, the Treasury official overseeing the bailout program, said, “General Motors’ IPO is a testament to that company’s turnaround and the significant progress we have made continuing to exist our investments and recover taxpayer dollars.”

With the sale of the extra stock, the government’s total ownership of GM has been reduced to 33.3 percent, down from 60.8 percent before the initial public offering.

Treasury has said it will receive another $2.1 billion from GM when the automaker repurchases preferred stock that was issued as part of the bailout support. That sale is supposed to take place this month.

In the IPO, GM’s owners — mainly the U.S. government — sold 478 million shares at $33 each.

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