(The following is a reformatted version of a press release
issued by General Motors and received via e-mail. The release
was confirmed by the sender.)
Dec. 19, 2012
GM to Buy Back Stock from U.S. Treasury Department
U.S. intends to fully exit GM investment within 12-15 months
DETROIT, MI - General Motors today said it will purchase 200
million shares of GM common stock held by the U.S. Department of
the Treasury for $5.5 billion, or $27.50 per share. The share
buyback is part of the Treasury’s plan, also announced today, to
fully exit its entire holdings of GM stock within 12 to 15
months, subject to market conditions.
Treasury has announced its intention to sell its remaining
shares of common stock into the market through various means and
in an orderly fashion. Treasury intends to begin its
disposition of its remaining shares as soon as January 2013,
consistent with a pre-arranged written trading plan. In
addition, Treasury has agreed to relinquish certain governance
rights that were included in the U.S. Treasury Secured Credit
Agreement with GM.
“This announcement is an important step in bringing closure to
the successful auto industry rescue, it further removes the
perception of government ownership of GM among customers, and it
demonstrates confidence in GM’s progress and our future,” said
Dan Akerson, Chairman and CEO of GM.
Dan Ammann, Senior Vice-President and CFO added, “A fortress
balance sheet has been a pillar of GM’s financial strategy and
has enabled us to undertake today’s actions. GM’s balance sheet
will remain very strong, with estimated liquidity of
approximately $38 billion at the end of 2012, following the
closing of the share buyback.”
The repurchase price of $27.50 per share represents a 7.9
percent premium over the closing price on December 18, 2012.
The share buyback is expected to close by the end of the year.
This transaction will be accretive to earnings per share, as
GM’s total shares outstanding on a fully-diluted basis will be
reduced by approximately 11 percent. In association with this
share buyback, GM expects to take a charge of approximately $400
million in the fourth quarter, which will be treated as a
After the repurchase, Treasury will continue to own
approximately 300 million shares of GM common stock, or
approximately 19 percent of the outstanding shares on a fully-diluted basis. Government ownership of GM stock was the result
of the auto industry rescue that began under President George W.
Bush in 2008 and which was expanded by President Barack Obama in
The industry in general, and GM in particular, have rebounded
sharply since the rescue. Since the rescue, GM has announced
investments of more than $7.3 billion in the U.S. and created or
retained more than 20,000 jobs.
“We come to work every day grateful that taxpayers from the US
and Canada stepped forward to rescue our industry, and
determined to show this extraordinary help was worth it,”
General Motors Co. (NYSE:GM, TSX: GMM) and its partners produce
vehicles in 30 countries, and the company has leadership
positions in the world’s largest and fastest-growing automotive
markets. GM’s brands include Chevrolet and Cadillac, as well as
Baojun, Buick, GMC, Holden, Jiefang, Opel, Vauxhall and Wuling.
More information on the company and its subsidiaries, including
OnStar, a global leader in vehicle safety, security and
information services, can be found at http://www.gm.com.
In this press release and in related comments by our management,
our use of the words “expect,” “anticipate,” “possible,”
“potential,” “target,” “believe,” “commit,” “intend,”
“continue,” “may,” “would,” “could,” “should,” “project,”
“projected,” “positioned” or similar expressions is intended to
identify forward-looking statements that represent our current
judgment about possible future events. We believe these
judgments are reasonable, but these statements are not
guarantees of any events or financial results, and our actual
results may differ materially due to a variety of important
factors. Among other items, such factors might include: our
ability to realize production efficiencies and to achieve
reductions in costs as a result of our restructuring initiatives
and labor modifications; our ability to maintain quality control
over our vehicles and avoid material vehicle recalls; our
ability to maintain adequate liquidity and financing sources and
an appropriate level of debt, including as required to fund our
planned significant investment in new technology; the ability of
our suppliers to timely deliver parts, components and systems;
our ability to realize successful vehicle applications of new
technology; the effects on the U.S. economy of the “fiscal
cliff” and any associated tax increases or spending cuts; the
conditions in the capital markets that impact the UST’s ability
to sell its shares of GM common stock; and our ability to
continue to attract new customers, particularly for our new
products. GM’s most recent annual report on Form 10-K and
quarterly reports on Form 10-Q provides information about these
and other factors, which we may revise or supplement in future
reports to the SEC.
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