DETROIT -- American Axle CEO Richard Dauch announced today that he's planning to sell 2.5 million shares of his company stock for about $30 million -- less than a year after the supplier won a bailout from General Motors to avoid bankruptcy.
Dauch, 67, is selling the shares as part of a personal asset diversification and estate planning strategy, said company spokesman Christopher Son.
The sale would bring Dauch about $30 million by March 31, 2011. The average sale price stated in the plan is about 11 percent higher than American Axle's Thursday closing price of $10.82 per share for the 2.5 million shares.
In September, the company closed a deal with GM -- which accounts for about 80 percent of the supplier's sales -- that gave the supplier $110 million in cash, a $100 million line of credit and 10-day payment terms into 2011 in exchange for allowing GM to buy up to roughly 20 percent of American Axle's common stock.
The deal enabled American Axle to revamp its debt structure.
Dauch's sale of about 25 percent of his nearly 10 million shares will begin April 1 and end March 31, 2011. He will retain beneficial ownership of more than 10 percent of the company's common stock and remain American Axle's largest individual shareholder.
Stock recovery
Shares of American Axle closed at $10.55 per share today, down 27 cents or 2.5 percent on the day.
During the height of the auto industry's financial crisis last April, American Axle stock traded for as little as $1 a share. The shares still traded for $1.13 in July before the GM bailout was announced. But following the GM aid, the shares began recovering and reached almost $11 a share on Thursday.
The Detroit-based axle and driveline component supplier posted a $253 million loss in 2009 on revenue of $1.5 billion.
In December, American Axle issued new shares of common stock and new bonds due 2017 to raise nearly $500 million.
