by Staff Writers
New York (AFP) Nov 3, 2010
General Motors on Wednesday said it seeks to raise 13 billion dollars from a new stock offering as part of the auto giant's efforts to break away from government ownership.
The initial public offering (IPO), one of the largest in US history, will consist of 365 million shares of common stock, with the estimated price range for the offering of common stock at 26 dollars to 29 dollars per share, said the government-rescued company.
GM will also issue 60 million preferred shares at 50 dollars per share.
The company Monday made a three-for-one stock split on the shares of common stock that are to be issued, according to its filing with the Securities and Exchange Commission (SEC).
The IPO, which will be a turning point in the crisis that forced the nation's largest automobile manufacturer to declare bankruptcy in 2009, is expected this month.
No date for the IPO was announced on Wednesday.
GM said it would not receive any proceeds from the sale of the common stock by the selling stockholders in the IPO.
GM chief executive Dan Akerson said in September that it could take a "couple of years" to repay the US government's 50-billion-dollar investment.
The IPO should allow the US government, which owns nearly 61 percent of the company, to recoup some of its investment.
GM separately projected third-quarter net profit between 1.9 and 2.1 billion dollars, which would mark a third consecutive quarter in the black. Financial results were due on November 10.
Industry analyst Michelle Krebs at Edmunds.com said that GM should have waited to log more solid quarterly earnings before going public.
"But there's a push by GM and from other places -- including the federal government -- to have GM go public and get the government out of its business," she said.
"My hunch is that GM's Chinese partner SAIC is going to buy a stake in the new GM. The negotiation of the partners' tech deal was curiously timed," she added.
GM earlier announced it had agreed closer ties on Wednesday with partner Shanghai Automotive Industry Corporation, China's biggest listed automotive company, to boost cooperation, including the development of new energy vehicles.
SAIC and GM's Shanghai GM joint venture sold about 843,000 vehicles in China in the first 10 months of the year.
Last year SAIC-GM-Wuling became China's first vehicle manufacturer to top one million units of sales and production. It has already reached this mark in 2010, GM said.
Once the world's largest corporation, General Motors sold more vehicles than any other automaker from 1931 through 2007, after which it lost the crown to Japan's Toyota.
Hit by falling sales amid a steep US recession, GM was forced into a government-backed bankruptcy reorganization on June 1, 2009. It emerged a little more than a month later with a debt pile of 48.4 billion dollars.
The automaker transferred its main assets to a new government-supported car company under a plan financed by the administration of President Barack Obama and the Canadian government.
The US government owns a 60.8 percent stake in General Motors Company and the Canadian and Ontario governments have an 11.7-percent holding.
The United Auto Workers union, whose trust pays for retiree health care, owns 17.5 percent.
GM said in the SEC filing that the new stock will be listed on the New York Stock Exchange under "GM."
The Toronto Stock Exchange has conditionally approved the listing of GM common stock under the symbol "GMM," subject to GM fulfilling all the exchange's requirements, it said.
Car Technology at SpaceMart.com
|The content herein, unless otherwise known to be public domain, are Copyright 1995-2014 - Space Media Network. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement