General Motors expects to return to an annual profit in 2011 and estimates stock in the new company it will launch will be worth as much as $48 billion, according to estimates filed Thursday in its bankruptcy case.
The figures, the first provided by the company, show the tough haul ahead for the government to make money on its investment in rescuing the nation's largest automaker, despite a bankruptcy restructuring that will slash its debt and overhead.
The company's financial adviser, Evercore Partners, offered projections for GM's finances in its bankruptcy case based on several scenarios. It forecasts that GM will lose $17.5 billion this year before reaching a profit of $3 billion in 2011 before taxes, rising to $7.8 billion in 2014.
The new GM will count on a rebound in U.S. vehicle sales from about 10 million this year to about 16 million by 2012 to pull back into profitability, pumping up its output from 3.8 million vehicles worldwide this year to 6 million by 2014. The estimates are slightly more pessimistic than what GM used in its Feb. 17 plan but match those of some analysts.
The estimates suggest that the government's 60.7% stake in GM would be worth up to $29 billion after bankruptcy. Combined with $8.8 billion in debt and preferred shares, the government would be about $12 billion short of the $50 billion in loans it has pledged to GM.
The administration has warned that it would likely have to write off the $19.4 billion it lent GM before it filed this week. It hopes to make up much of the other loans by selling its stake.
The 17.5% stake held by the UAW trust fund for retiree health care would be worth up to $8.4 billion. Combined with $9 billion in debt and preferred shares, the trust fund would hold $17.4 billion, shy of the $20 billion it was owed before bankruptcy.
Bondholders carrying $27 billion of old GM's debt would get a 10% stake worth $3.8 billion to $4.8 billion.