GM’s planned public stock sale to cut U.S. stake

Article by Christian Andrei, on August 27, 2010

Sources revealed that the public stock sale that General Motors Co. is planning is likely to end with the US government getting a minority stake while at the same time, raising new funds for the company.

These sources added that the US Treasury, which owns 60.8% of GM stock after a $50 billion bailout last year, intends to sell about 20% of its holdings as part of the stock sale.

This would result to the US government being left with a 49% stake before accounting for the further dilution from new GM share issuance.

The terms that will eventually emerge from GM's planned IPO are expected to dominate interest among potential investors and analysts. For sure, these people will be among those who will listen intently as GM's new executive team led by CEO Ed Whitacre makes its first financial presentation. 

The sources revealed also that GM is thinking about issuing new capital in the stock offering, chipping away at the one liability on its balance sheet that the government-funded restructuring was unable to address -- a $27 billion shortfall in its pension funding.

In addition, the retiree health-care trust, which is affiliated with the UAW but administered independently, means to sell part of its 17.5% stake in GM to raise cash and diversify its portfolio.

After the US Treasury, the No. 2 GM shareholder is the health-care trust. However, the sources would like to emphasize that there have no final decisions made.

There's still no update with regards to the plans for the two smaller GM shareholders. In fact, 11.7% of GM is owned by the governments of Canada and Ontario; while bondholders in the Old GM, now known as Motors Liquidation Co., possess 10%. [via autonews]

Topics: gm, ipo

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

Volkswagen Group’s dieselgate saga continues, but it appears the German company would be able to get out of trouble, but it would not be unscathed. This development comes as Volkswagen...
by - January 22, 2017
When a car has been in the market for nearly six years, it loses some of its luster and its customers tend to go for the all-new model with a...
by - January 22, 2017
Remember Zenos Cars, a British carmaker that specializes in designing and building lightweight and high-performance sports cars? If you are wondering how the company is faring with their E10 lightweight...
by - January 21, 2017
Mercedes-Benz has revealed that in 2017, its series 124 coupé will be celebrating its 30th anniversary. While this itself is a significant event, it will also mean that this model...
by - January 21, 2017
BMW’s 550i xDrive has long been considered as one of the most successful business sedans in the world. For the brand, this may not be enough as it has officially...
by - January 20, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries