NEW YORK, May 2 (IFR) - General Motors management today
largely skirted the issue of whether the US Treasury Department
would soon sell its remaining 16.4% stake (241m shares) in the
rescued automaker, but expectations remain high that a near-term
sale of at least part of the stake via a block trade is likely.
Reporting sharply better-than-expected first quarter
earnings today, GM played down its move last week to file
an SEC registration statement outlining a potential share and
warrant offering by unnamed "selling shareholders".
Nevertheless the shelf means Treasury could sell the stake
as soon as this afternoon.
Responding to an analyst question on today's conference
call, GM Chief Financial Officer Dan Amman described the filing
"We wanted to put that up, as we said in a press release
concurrent with filing that shelf, that we are not aware at this
time of any specific plans by any selling shareholder to execute
an offering," he said. "But we want to take that mechanical step
to have it ready."
GM shares rose as much as 5.4% to $31.82 after its earnings
beat consensus forecasts on both the top and bottom line. The
automaker also pointed to its increased market share.
The future of the stake was clarified in January when
Treasury initiated a "pre-arranged trading plan" for its
remaining GM stake after earlier mandating Citigroup and JP
Morgan as lead managers on the sale.
Treasury is looking to fully exit the position within 12-15
months "in an orderly fashion", subject to market conditions, it
said at the time.
Though Treasury has not publicly disclosed exactly how it
will undertake the sale, it has said that it intends to employ
"various means", possibly including a block sale and/or a
dribble out program.
In December, Treasury sold 200m shares back to the automaker
for US$27.50 a share or US$5.5bn, a premium to then market value
of the stock.
Though GM went public at US$33 a share in 2010 in a deal led
by Morgan Stanley and JP Morgan, Treasury's breakeven price is
more than twice this level.