GM approaching sovereign wealth funds to boost stock sale

Article by Christian Andrei, on October 6, 2010

Two sources say that meetings have taken place between investment bankers for General Motors Co. and sovereign wealth funds and private investors in the Middle East and Asia to measure interest in GM’s planned stock sale.

These people also revealed that GM’s bankers intend to discuss its initial public offering with Riyadh, Saudi Arabia- based Kingdom Holding Co., Abu Dhabi-based Mubadala Development Co., Qatar Holdings LLC and Singapore-based Temasek Holdings Pte.

GM is seeking large international investors as part of its strategy to heighten the demand for its stock in preparation for an IPO next month.

The sources also said that GM and its bankers are proceeding with the stock offering in a year when at least 47 companies have postponed or withdrawn US IPOs. Matt Therian, research analyst with Renaissance Capital LLC, said that sovereign wealth funds have, in the past, been involved with the larger international deals.

Therian added that this is “not a $100 million tech firm” but that it is still a “very large deal and it's still a market that has pricing pressure.”

Last month, two insiders said that GM and the US Treasury Department, which owns 61% of the company, seek to hold an $8 billion to $10 billion IPO in November, which is scaled back from its initial plan of up to $16 billion. They also disclosed that the department prefers a high share price over a large initial sale. [via Bloomberg]

Topics: gm, united states

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