The U.S. Treasury today said that the 30 million shares of GM common stock it is selling at $34.41 per share is expected to total a $1.03 billion recovery for U.S. taxpayers. The UAW Retiree Medical Benefits Trust (VEBA) has also agreed to sell 20 million shares in the offering, making the total offering size 50 million shares. Proceeds to VEBA from the common stock offering will total approximately $688 million.
After this offering, Treasury will own approximately 189.2 million shares of GM common stock. Treasury’s sale of its GM common stock is part of its continuing efforts to wind down the Troubled Asset Relief Program (TARP). At the conclusion of this sale, the taxpayers will have recovered $32.53 billion of the initial $49.5 billion GM bailout. Lazard is serving as Treasury’s financial advisor on the management and disposition of Treasury’s investment in GM.
This means that taxpayers will ultimately take a loss on the bailout of GM. Citigroup Global Markets, J.P. Morgan Securities and Morgan Stanley & Company, all also culpable in the financial collapse that sent GM into bankruptcy during the Great Recession, will earn handsome fees from U.S. taxpayers via commissions.
To date, including the anticipated proceeds from this offering, Treasury claims it has collected more than 95% ($399.4 billion) on the funds disbursed through TARP ($419.97 billion). Excluding the housing programs, and including the proceeds from sales of all Treasury AIG shares, Treasury disbursed $411.72 billion for all TARP investment programs and has now collected $416.95 billion. The real cost of the various bailouts and other Treasury subsidies of Wall Street is much higher, and likely will not be known for a long time if at all.
GM has filed a registration statement and prospectus with the Securities and Exchange Commission see EDGAR on the SEC Web site at www.sec.gov. Copies may also be obtained from Citigroup Global Markets Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 (telephone: (800) 831-9146); J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 (telephone: (866) 803-9204); or Morgan Stanley & Co. LLC, 180 Varick Street, 2nd Floor, New York, NY 10014, Attn: Prospectus Department (telephone: (866) 718-1649, or email: firstname.lastname@example.org).