Reuters

(Reuters)

Report: Treasury Not Planning to Sell GM Shares Until August

Reuters

The U.S. Treasury does not plan to start selling its remaining shares in General Motors Co until August at the earliest, after the automaker's second-quarter financial results, people familiar with the matter said.

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The Treasury, which holds a 32 percent stake in the top U.S. automaker, plans to wait on a secondary offering in light of GM's recent share performance, and the earliest possible time for its follow-on sale is August, these people said.

The sources asked not to be identified because the matter is not public.

The U.S. government is also opposed to the idea of selling a portion of its shares directly to GM, although such a transaction was suggested as a possible option, these people said. A Treasury spokesman declined to comment.

Six months after GM's $23.1 billion initial public offering, investors have been speculating that the U.S. Treasury is itching to sell a big part of its remaining stake after the lock-up period for selling by major shareholders expires on May 22.

The administration of U.S. President Barack Obama received a nearly 61 percent stake in GM two years ago in return for its $50 billion bailout of the automaker.

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Before the IPO, GM was touted as a restructured company with a drastically lower break-even point in North America, a leading market position in China and other emerging markets, turnaround potential in Europe and a strong lineup of new fuel-efficient cars such as the Chevrolet Cruze and plug-in hybrid electric Chevy Volt.

But oil prices spiked, hurting sales of higher-margin trucks, and generous discounts to new-car buyers continued.

Worries about supply disruptions following the earthquake in Japan have also unsettled investors anxious for the Treasury to exit its position in GM.

GM shares were up 3 cents in early afternoon trading on the New York Stock Exchange at $31.33.

(Reporting by Soyoung Kim; Editing by Derek Caney and Robert MacMillan)

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