GM IPO to Come on Tuesday

About one year after American manufacturer GM filed for bankruptcy, another filing, this time of a more positive nature, is expected to be made today. We are talking about the already over discussed initial public offering filing, a filing which according to sources close to the matter, will be made today, (Tuesday, August 17).

The same sources, cited by moneycontrol.com, say GM will be submitting with the US Securities and Exchange Commission an initial prospectus worth $100 million. The carmaker hopes to raise between $15 billion to $20 billion, making this one of the biggest IPOs in history.

The IPO is expected to shave 20 percent of the stake held by the US through the Treasury, meaning the US would become a minority owner (the US now holds 61 percent of GM). To do so, GM would be throwing into the market a fifth of the government's 304 million shares.

In addition to selling US' stock, GM might issue new shares and sell the ones owned by Export Development Canada and the UAW retiree healthcare trust fund. The IPO will be handled by JPMorgan Chase & Co. and Morgan Stanley, while the credit line is supported by several other banks, including Credit Suisse, Deutsche Bank AG, Goldman Sachs,UBS AG and Royal Bank of Canada.

Sources claim GM will add more banks to the credit line in order to reduce the banks' commitments from $500 million each.

The IPO has been delayed by a few days after GM announced the retirement of its current chairman and CEO, Ed Whitacre. He will be replaced starting September by Dan Akerson, a person regarded as “what Wall Street wants.”