Treasury Nets $2.1 Billion in GM's Buyback of Preferred Shares

Chevy Volt from General MotorsGeneral Motors (GM) has repurchased $2.1 billion in preferred stock from the federal government, the Treasury Department said Wednesday, further reducing the amount the automaker owes taxpayers following last year's bailout. With the purchase, the federal government has sold all of its preferred-stock holdings issued under the Troubled Asset Relief Program (TARP), Treasury said in a statement.

The stock purchase brings to $23.1 billion the amount the automaker has repaid Treasury as part of the government-backed $49.5 billion bailout last year. The repaid amount includes $13.5 billion Washington netted following GM's initial public offering of stock last month, Treasury said. GM has already repaid $6.7 billion in debt, and Treasury has also collected $800 million in interest and dividends.

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In October, Treasury accepted an offer to repurchase the 84 million preferred shares it gained as part of the TARP bailout. GM has said it expects to record a $700 million charge against its fourth-quarter net income to account for the difference between the purchase price and the recorded value of the preferred shares, Reuters reported.

The latest transaction further reduces the government's stake in GM to about 33%, or about 500 million shares of common stock, down from the 61.5% that Treasury held prior to GM's IPO.

Of the $389 billion Treasury doled out in TARP funds, the agency has received back $266.5 billion in the form of repayments and income from dividends, interest and the sale of other securities, it said. GM shares ended Wednesday's trading day down about 0.8%, or 28 cents, to $33.61 a share.
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