Earlier yesterday morning, news broke that General Motors intends to repurchase 200 million shares, or 40 percent, of its common stock held by the U.S. Department of Treasury for $5.5 billion — a move that sent GM’s stock up $1.69 in one day. The news coincided with the announcement that the United States Treasury plans to fully divest its holdings of GM stock within 12 to 15 months, based on market conditions. However, the same cannot be said for the government of Canada, which currently holds a 9 percent stake in GM. At least, not officially.
According to the latest report from Automotive News, Canadian Finance Minister Jim Flaherty stated that the Canadian government has yet to set a time table to divest its stock in General Motors.
A brief recap: in 2009, Canada provided C$10.8 billion ($10.89 billion USD) to keep GM afloat; the funds got the country a 9 percent stake in GM, or 140 million common shares, and 16.1 million preferred shares. At the end of September, the stake was worth only C$3.5 billion. To say the least, GM’s shares will need to appreciate for Canada to see any return on its investment. And we don’t think losing Chevrolet Camaro production to Lansing Grand River is what Canada had in mind.