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Monday, 15 November 2010 23:05

General Motors Launches IPO

General Motors Co. plans to raise as much as $12 billion in its initial public offering after increasing the asking price by 14 percent, according to a statement Nov 16.
In total, GM could sell $12 billion in common stock and nearly $3.45 billion in preferred stock, depending on market demand and the final price.


Sixty-one percent owned by the U.S. Treasury, GM is now selling 365 million shares at $32 to $33 each. The IPO was already multiple times oversubscribed at the original range of $26 to $29 apiece. GM's underwriters also plan to exercise an option to buy 54.8 million more shares, the people said. The offering is scheduled for Nov. 17, according to Bloomberg.

The company filed the long-awaited paperwork with the Securities and Exchange Commission this afternoon, outlining the Treasury Department's intention to sell as much as one-third of the 61 percent equity stake it acquired as part of the government's bailout of GM.


The U.S. government plans to sell at least 263.5 million shares. The United Auto Workers health care trust fund will sell 71 million shares, and the Canadian and Ontario governments will sell 30.5 million shares.


The total amount of common shares could rise by 15 percent, or another 55 million, if GM's underwriters exercise an "over allotment option." The underwriters can also sell another $450 million in preferred stock, or 9 million more shares, if they choose because of market demand.

GM confirmed its shareholders agreed to split 500 million shares three ways, so it has 1.5 billion shares to offer.

It plans to deposit about 70 million shares into its pension fund.

If the underwriters don't exercise their option, the government would hold 41.3 percent of the 1.5 million shares — 38.7 percent — including the new shares.

 

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