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UAW Trust Raises $171 Million from GM Warrant Sale
The United Auto Workers union's retiree health care has garnered $171 million from the previously announced sale of its entire holding of 45.4 million General Motors Co. stock warrants.
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The United Auto Workers union's retiree health care has garnered $171 million from the previously announced sale of its entire holding of 45.4 million General Motors Co. stock warrants.
The proceeds will be used to provide medical benefits for retired GM hourly workers.
The warrants, which expire at the end of 2015, were priced by auction at $3.85 each roughly half the potential maximum. The sales are expected to close by about Aug. 12. The securities were listed today on the New York Stock Exchange.
Each warrant represents the right to buy one share of GM common stock for $42.31. The company's shares closed at $35.58 today.
The UAW trust agreed in 2007 to assume responsibility for the retiree health benefits of its members at Chrysler, Ford and GM in exchange for a series of cash payments. By the time the trust took effect in January 2010, the union had agreed to accept warrants, common and preferred shares and debt in lieu of cash from the financially strapped companies. Ford has paid cash to fully fund its obligations.
The retiree trust still owns 10.1% of GM stock and 41.5% of Chrysler's equity.
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