GM's initial public offering expected to reach $10 billion
General Motors is going public, again. The sale of GM stock is expected to raise about $10 billion in an initial public offering, dropping the U.S. government's majority ownership stake in the automaker to a minority position, according to Associated Press reports citing unidentified sources.
GM is poised to announce details of its IPO plan today.
GM common stock is expected to sell for between $26 and $29 a share when the IPO takes place around Nov. 18, the wire service reported Monday. At that price, Uncle Sam's ownership stake would drop below the 50 percent mark for the first time since the Obama administration bailed out the automaker and forced it into bankruptcy.
Also, given the pricing plans detailed in these reports, the Detroit auto manufacturer would be valued at more than $46 billion.
During the bailout, U.S. taxpayers contributed nearly $50 billion to save GM. The company is currently owned partly by the U.S. government, a United Auto Workers health care trust, the Canadian and Ontario governments and former GM bondholders.
GM will not make any money from the sale of the 365 million common shares that make up the IPO. Instead, it will sell roughly $3 billion worth of preferred stock (that will convert to common stock in 2013) and use the money to repay loans and make pension payments, sources told the AP.
The IPO means GM shares can start trading, again, on the New York Stock Exchange. It was taken off the exchange during the bankruptcy and bailout.