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GM IPO Details Emerge

Tuesday, November 02, 2010 - 02:17 PM

(Alex Goldmark, Transportation Nation) General Motors post-bailout, post-bankruptcy IPO is expected to raise between $8-$13 billion and transform the U.S. government's role from majority owner to minority shareholder.  But the federal government would still be the largest owner.

GM is expected to file a final registration for the IPO on Wednesday, the same day they release quarterly earnings (and are expected to announce they are profitable for the third straight quarter). That's when we'll officially know how much they are trying to raise, as well as the exact share price. Some hints have already leaked out, though, and early reports are that shares will likely be priced at $26 to $29--considerably higher than earlier estimates. And at that price, AP estimates the total company valuation will be around $46 billion, which is similar to Ford.

During the bailout, U.S. taxpayers ponied up $50 billion to save the company and has so far gotten about $10 billion back. GM will use the money from the IPO to pay off debt, not raise operating capital. Initially, GM will only be offering a portion of their shares. The rest will come in subsequent offerings at a higher price, GM and the U.S. Government are hoping.

According to multiple reports, GM executives will now begin meeting with major investors --like foreign-based sovereign wealth funds, including those based in Kuwait and China.

For a breakdown of likely ownership stakes see the Detroit Bureau.

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