GM files for public offering of shares
Written by on August 18th, 2010 in Latest News.
General Motors has filed the first paperwork required for the initial public offering of its shares.
The automaker also said Wednesday that it will list on the Toronto Stock Exchange.
General Motors world headquarters in Detroit. The automaker says it will list its shares in Toronto. (Paul Sancya/Associated Press)
The company said the U.S. government and other stakeholders will sell common shares worth $100 million US, and GM will sell preferred shares worth $100 million.
Those numbers are rough estimates, and the amount raised in the actual stock sale is expected to be much higher.
The company did not immediately specify the selling price of the shares.
Federal Finance Minister Jim Flaherty said Aug. 13 that Ottawa was “urging” GM to list on the TSX.
“I certainly expect the shares to be listed in Toronto,” Flaherty said. “That is, I reckon, a reasonable expectation on behalf of the people of Canada since we are a major shareholder in the company.”
On Wednesday, Flaherty said the IPO filing was the latest sign that the company “is on the road to recovery.”
“We achieved our primary goal of preventing the collapse of the auto sector in Canada,” Flaherty said in a statement, “including the parts sector, during this hard period, and preserving Canada’s place in the auto industry.
“Our success is measured by the thousands of jobs that were saved in the auto sector.”
Ottawa might sell into IPO
Canada may participate in an initial public offering by General Motors, he said, “but any choice we take is with the goal of maximizing the return for taxpayers while reducing our ownership in the company as quickly as is appropriate.”
GM delisted its shares from the New York Stock Exchange in early 2009 when the company started a massive reorganization under Chapter 11 bankruptcy protection in the United States. As part of its restructuring, the company accepted billions of dollars in aid from the American, Canadian and Ontario governments.
GM is keen to sell stock so it can pay off those loans. Its IPO could be the largest in U.S. history. It would have to bring in $70 billion US to pay back all of GM’s stakeholders.
The go came six days after the automaker announced that Edward Whitacre would step down as CEO on Sept. 1 and be replaced by board member Daniel Akerson.
It also reported a $1.3-billion second-quarter profit, its second-straight positive quarter.
With files from The Canadian Press and The Associated Press
