Traverse City Record-Eagle

June 7, 2013

GM CEO says dividend, share buyback possible

TOM KRISHER
AP Auto Writer

---- — DETROIT (AP) — General Motors CEO Dan Akerson says the company’s finances are sound enough to consider paying a dividend or even buying more stock from the U.S. government.

The CEO, in comments after GM’s annual meeting Thursday, also said the company first has to keep investing in new vehicles and equipment.

GM cut its dividend in July of 2008, amid financial troubles that eventually landed it in bankruptcy protection. The company needed a $49.5 billion government bailout in 2008 and 2009 to survive the financial crisis and the Great Recession.

In exchange for the bailout, the government got 60.8 percent of GM’s stock. The government has been shrinking its stake, and will cut its holdings in GM to under 14 percent when it sells 30 million shares. After the sale, the Treasury Department will own 189.2 million shares, GM said in a regulatory filing Thursday.

Akerson said that once the government’s stake drops below 10 percent, restrictions on the number of shares it can sell each quarter are lifted. That, he said, may open the door for GM to buy more shares and potentially hasten the government’s exit.

The government has said it intends to sell its entire stake in GM by April of 2014. As of May 10, the government had recouped about $30.7 billion of the bailout money, leaving taxpayers were about $18.8 billion in the hole.

The U.S. Treasury Department says it has set a price of $34.41 per share. Treasury said the sale will result in aggregate proceeds to the government of $1.03 billion.