Old General Motors to sell GM stock, warrants
May 24, 2011 (Associated Press) DETROIT - The company that got stuck with General Motors Co.'s debts and bad assets will begin selling stock and warrants in the new GM, according to a regulatory filing Tuesday.
Motors Liquidation Co. said in the filing with the Securities and Exchange Commission that the stock and warrants being sold starting Tuesday are worth a total of $5.7 million. Motors Liquidation was split from the new GM by a bankruptcy judge in 2009.
The company says it will sell 87,000 shares of GM worth $2.7 million. It also will sell 158,000 warrants to buy GM stock.
Half the warrants allow people to buy new GM stock for $10 per share and the other half for $18.33 per share. The company says the warrants are worth $3 million.
Motors Liquidation owns about 10 percent of GM's common stock, or 1.56 billion shares, as well as warrants to buy 273 million more shares.
Shares of GM rose 6 cents to $ 31.02 in pre-market trading.
GM was split into two companies when it emerged from bankruptcy protection in 2009. In March, a federal bankruptcy judge approved a plan to sell off and clean up GM's old assets, including 89 industrial sites in 14 states.
The plan created four trusts to handle the work. An environmental trust will provide $536 million to clean up old sites. The money will come from the sale of property and equipment at those sites.
A separate trust will distribute GM stock to some creditors. More than $275 billion in claims have been filed against GM since its bankruptcy, but most have been resolved.
Other trusts will handle asbestos claims and litigation-related claims.
Motors Liquidation said it has sold or secured sale agreements for 14 properties, including a Wilmington, Delawre, assembly plant that was sold to Fisker Automotive Inc. to produce hybrid vehicles, a Pontiac, Michigan, plant that will become a movie studio, and a Strasbourg, France, plant that was sold back to GM.
GM spent six weeks in bankruptcy protection in the summer of 2009. When it emerged, it was 61 percent owned by the government in exchange for $50 billion in government aid. The government's share was reduced to 33 percent after an initial public offering in November.