Over the last few months, General Motors Company has been setting the stage for taking the company public. Last month the automaker cleared a major hurdle when it announced that it would acquire AmeriCredit Corporation. On Wednesday, it secured a $5 billion bank credit, and earlier today it reported second quarter net profits of $1.3 billion – its largest quarterly profit since 2004.
With all the pieces finally in place, GM plans to file the registration for its IPO, which could come as early as Thanksgiving. The filing is expected to take place tomorrow or Monday at the latest.
The IPO is expected to reduce the U.S. Treasury’s stake in the company to that of a minority shareholder and could go a long way toward silencing critics of the Obama administration and its $50 billion taxpayer- funded bailout of the automaker. GM has since repaid $7 billion.
GM’s IPO is expected to be the largest ever for a U.S. company and only the second by an American automaker since Ford went public in 1956. In June, all-electric automaker Tesla Motors raised $226 million through an IPO.
President Obama’s auto task force chief, Ron Bloom, and GM executives have denied that the timing of the IPO will be tied to November’s Congressional elections, although a successful offering would no doubt benefit Democrats.
General Motors’ chairman and CEO, Ed Whitacre, plans to take an active part in the company’s efforts to raise investor excitement about the IPO. GM’s CFO, Chris Liddell, has reportedly been tasked with reaching out to potential investors and creditors.
According to one person with personal knowledge of the matter, GM’s $5 billion credit facility includes commitments from some of Wall Street’s biggest investment banks. They include JPMorgan Chase & Company, Morgan Stanley, Goldman Sachs Group Incorporated and Bank of America Corporation. Each has committed $500 million in revolving credit to fund GM’s operations according to the source.
General Motors and its financial advisors will reportedly attempt to sell $10 billion in equity initially and then ramp up its offering depending on market conditions and investor interest. The IPO will ultimately seek to sell at least 25% of GM’s equity according to one source.
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