GM plans to sell $13bn of shares
Wednesday 03 November 2010
General Motors is expected to sell just over $13bn of shares in its initial public offering, cutting the US government's stake while opening the door for investment by overseas state-backed investors.
GM was expected to file the terms in an updated prospectus for its IPO with the US Securities and Exchange Commission last night.
The company is set to sell 365 million common shares at between $26 and $29 each, raising between $9.5bn and $10.6bn, and making it one of the largest flotations ever in the US. The manufacturer of classic car marques including Chevrolet, Buick and Cadillac emerged from bankruptcy in 2009 with the US Treasury as its majority shareholder, is also likely to sell a combined $1.5bn to $2bn stake to four or five sovereign wealth funds.
The IPO could value the entire company close to $60bn, below the $67bn needed if US taxpayers are to break even on the equity held by the Treasury. By comparison, Ford has a market capitalisation of about $48bn.
The Treasury, which holds a 60.8 per cent stake in GM as a result of its $50bn bailout, is prepared to take a loss on the initial sale, but hopes to break even over time as the stock appreciates.
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