GM Announces IPO Pricing

The moment all the men and women in the executive chain of American manufacturer GM were waiting for finally arrived this week. The American carmaker announced it has commenced a process at the end of which it hopes to reduce the stake held by the US government and give the company a push towards better finances.

The price of a common stock share, characterized by the former auto czar Steven Rattner as one which will “certainly get the taxpayers most of their money back,” has been set at between $26.00 to $29.00 per share.

The price is lower that Rattner's estimates ($35 or $40 a share), a situation which at some level displeased the official. Another source told boston.com back in September that if the US wants to break even with GM, the carmaker would have had to sell one share for $131.

GM will issue 365 million shares of common stock, as well as 60 million shares of its Series B mandatory convertible junior preferred stock. The Series B have a liquidation amount of $50 per share.

The carmaker hopes to gain out of the initial public offering (IPO) around $10.6 billion and reduce the stake held by the US government.

The IPO, yet to be approved in this form by the Securities and Exchange Commission (SEC), is being coordinated by a conglomerate of banks and financial institutions which includes Morgan Stanley, J.P. Morgan, BofA Merrill Lynch, Citi, Goldman, Sachs & Co., Barclays Capital, Credit Suisse, Deutsche Bank Securities and RBC Capital Markets.

More details about GM's IPO will surface throughout the week.