No dividend for GM common Stockholders is in sight, and Treasury – inexplicably to some – is selling at a loss into a rising market to get out.
The UAW Retiree Medical Benefits Trust (UAW VEBA) secondary public offering of up to 45,454,545 warrants to purchase GM common stock was priced at $3.85. They allow the purchase of one share at $42.31. The warrants expire 31 December 2015.
General Motors Company common is currently trading at ~$35.90 per share, above the $33 level of GM’s 2010 initial public offering but significantly below the $46.16 warrant breakeven price. GM’s high post-bankruptcy was $39. GM common pays no dividend, and there are no plans to do so during the next couple of years. (Read Treasury Now Selling More General Motors Stock at a Loss)
The UAW VEBA is offering to sell all of the warrants that it holds and will receive all of the net proceeds from the offering. GM will not receive any proceeds from the offering estimated at approximately $171 million.
Deutsche Bank Securities the sole book-running manager and auction agent for the offering has not yet announced results.
In July General Motors [NYSE: GM] announced Q2 net income of $1.2 billion, or $0.75 per GM common share. This was down from the second quarter of 2012 when GM’s net income was $1.5 billion, or $0.90 per fully diluted share.
Part of the decline was due to a net loss from special items, including an expensive recall in India for deliberately falsifying an emissions certification on more than 100,000 new vehicles that reduced net income by $0.2 billion, or $0.09 per share, and a tax increase at $0.29 per share, compared to the second quarter of 2012. (Read GM Earns $1.2 Billion in Q2 or 75 Cents a Share)
