GM to Buy Back Shares From Union
General Motors Co. (GM) on Monday said it agreed to repurchase about $3.2 billion of preferred stock from the United
Auto Workers Retiree Medical Benefits Trust.
The planned buyback is contingent on the auto maker completing an offering of senior secured notes by month's end. GM
said it is planning to offer notes with five-, 10- and 30-year maturities.
GM plans to repurchase 120 million preferred shares, or about 46% of the total held by the union's retirement fund,
for about $27 each.
The buyback will leaves the VEBA holding 140 million preferred shares, while the Canadian government holds 16 million
shares and the U.S. Treasury about 101 million shares.
General Motors expects to record a third-quarter charge of roughly $800 million related to the stock repurchase.
The UAW trust--known as a VEBA, for voluntary employee beneficiary association--received the shares as part of its
agreement to accept concessions as the auto industry struggled during the financial downturn, a move that reaped profits
during GM's initial public offering a few years ago.
GM's common shares closed Friday at $36.83 and were up 27 cents to $37.10 premarket. The stock is up 28% so far this
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