The federal government was – and yet is – a still a substantial shareholder, but it’s taking steps to end that stage in the corporation’s history.

At the rate of an ongoing federal sell-off from an initial $50 billion stake now underway, the moniker of “Government Motors” could no longer be justifiably applied against General Motors some time within the next 15 months.

On Monday, the Treasury disclosed it had divested itself of $489.9 million in GM shares leaving it still holding about 300 million shares, or about a 19-percent stake on a fully diluted basis, according to Automotive News.

In January, it was reported the federal government sold $156.4 million in GM shares. The government will reportedly disclose the average share price for stock that it sells after each pre-arranged plan for the stock’s trade is finalized.

In December, GM bought $5.5 billion of its own stock back from the Treasury.

At the same time, GM has reportedly been building for itself a “fortress balance sheet” and attempting to conservatively restore itself to increased profitability.

Its commitment to the electrified vehicle space it says is strong, and intended to grow. Its present product offerings are a mix of not-as competitive mild eAssist hybrids, two-mode light truck hybrids, the pending Spark EV, and the top-selling plug-in, the Volt and pending Cadillac ELR plug-in.

The bailout was the subject of much heated criticism and debate, and it’s generally agreed closing the door on that should in time help mend public perceptions where they have been damaged.

Automotive News

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The share buyback is expected to close by the end of the year. It is part of the U.S. Treasury’s plan, also announced today, to fully exit its entire holdings of GM stock within 12 to 15 months, subject to market conditions.

The Treasury has the intention to sell its remaining shares of common stock into the market through various means and in an orderly fashion. Treasury intends to begin its disposition of its remaining shares as soon as January 2013, consistent with a pre-arranged written trading plan.

In addition, GM said the Treasury has agreed to relinquish certain governance rights that were included in the U.S. Treasury Secured Credit Agreement with GM.

“This announcement is an important step in bringing closure to the successful auto industry rescue, it further removes the perception of government ownership of GM among customers, and it demonstrates confidence in GM’s progress and our future,” said Dan Akerson, chairman and CEO of GM.

This buyback will leave GM with estimated liquidity of approximately $38 billion at the end of 2012, following the closing of the share buyback.

The repurchase price of $27.50 per share represents a 7.9 percent premium over the closing price on Dec. 18, 2012.

After the repurchase, the Treasury will continue to own approximately 300 million shares of GM common stock, or approximately 19 percent of the outstanding shares on a fully diluted basis.

Government ownership of GM stock was the result of the auto industry rescue that began under President George W. Bush in 2008 and which was expanded by President Barack Obama in 2009.

“We come to work every day grateful that taxpayers from the U.S. and Canada stepped forward to rescue our industry, and determined to show this extraordinary help was worth it,” Akerson said.

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