Summers: GM's IPO could end its bailout

May 19, 2010 at 4:10 PM
| License Photo

WASHINGTON, May 19 (UPI) -- White House economist Lawrence Summers said U.S. automaker General Motors Co.'s initial public offering could allow for a complete payback of bailout funds.

Summers, director of the National Economic Council, said the government could recoup "most, if not all" of the $50 billion investment it has made in GM to help pull it through a prolonged industry-wide slump, the Detroit Free Press reported Wednesday.

GM went through bankruptcy last summer. When it emerged, the taxpayer's $50 billion investment was set up as government ownership of 61 percent of the company and about $6.7 billion in loans.

GM has paid back the loans. Earlier assessments, however, consistently said it would take years for the company to repay the government the other $42 billion.

New estimates, however, estimate the company's initial public offering later this year would raise up $75 billion to $78 billion.

"The prospects of repayment are brighter than they were a year ago," Summers said at an economic forum at the Brookings Institute.

Related UPI Stories
Latest Headlines
Trending Stories
Ted Cruz campaign pulls ad featuring softcore porn actress
Report: Clinton Foundation subpoenaed by State Dept. watchdog over charity projects
Ruby Rose, Gigi Hadid react to Kanye West's lyric about Taylor Swift
Kristen Wiig impersonates Peyton Manning on 'The Tonight Show'
NYC police officer found guilty of manslaughter in Brooklyn stairway shooting