GM divestiture has no timetable by the U.S., report says
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DETROIT -- The government doesn't plan to end its part ownership of General Motors in the near future, a newspaper reported today.
Tim Massad, the U.S. Treasury's acting assistant secretary for financial stability, said that there's no timetable for the government to exit GM, according to The Detroit News.
"Our perspective is that the company has made real progress, but the market hasn't given them as much credit for that as it might," Massad told the News.
Massad, who oversees the $700 billion Troubled Asset Relief Program and the government's 26 percent stake in GM common stock, told the newspaper that the Treasury must balance maximizing recovery for the taxpayers with the speed of exit.
If it were to exit now, the government would lose more than $15 billion on the $49.5 billion bailout at current stock prices, according to the newspaper.
The government has recovered about $23 billion of its GM bailout and initially held a 61 percent stake in the automaker.
The Treasury needs to receive $53 on average for each of its 500 million shares in GM stock to break even, according to the News.
The Obama administration does not plan to sell any GM stock before the November election because it might remind voters of the financial costs of the bailout, senior administration officials told the News.
You can reach Ellen Mitchell at emitchell@crain.com.
