Old GeneralMotors to sell GM stock, warrants

The company that got stuck with General Motors Company's debts and bad assets will begin selling stock and warrants in the new GM, according to a regulatory filing yesterday.

Motors Liquidation Company said in the filing with the US Securities and Exchange Commission that the stock and warrants being sold, which started yesterday, are worth US$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 US$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 US$10 per share and the other half for US$18.33 per share. The company said the warrants are worth US$3 million.

Motors Liquidation owns about 10 per cent 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 US$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 US$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 US$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, Delaware, 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 per cent owned by the government in exchange for US$50 billion in government aid. The government's share was reduced to 33 per cent after an initial public offering in November.

- AP