The federal government will become a minority shareholder after General Motors upcoming IPO, according to well-placed sources, with the maker planning to sell 365 million shares of newly-issued stock for between $26 and $29 apiece.
In all, reports the Reuters news service, the once-bankrupt maker expects to mark its return to being a publicly-traded company by selling off a total of $13 billion in stock, including $3 billion in preferred shares.
The maker is expected to begin an IPO roadshow on Wednesday, following its release of third-quarter earnings. Analysts expect GM to be in the black for the third quarter in a row.
While GM has declined to comment on the Reuters report and has not yet stated what day the IPO will be staged, it has clearly been taking steps to prepare the way for the offering, last week announcing plans to reduce its debt by $11 billion and, in the process, cut debt and related payments by about $500 million annually.
Reuters quotes well-placed sources saying GM expects to sell as much as $2 billion of its new stock to four or five foreign sovereign wealth funds. The maker has reportedly discussed its plans with Kuwaiti bankers, among others. It also has been given a close look-over by its Chinese manufacturing partner, SAIC, with which it produces the Buick line in Shanghai.
Reuters claims the IPO will bring the U.S. government’s stake in GM down from 61.1 to 43.3%, which would still leave it the company’s largest single investor, but no longer a majority stakeholder. The Canadian and Ontario provincial governments, meanwhile, would reportedly bring their shares down from 11.7% to 9.6%.
And the United Auto Workers Union, which holds 17.5% stake through its retiree health care fund, or VEBA, would see that drop to 15%.
The IPO is now expected to be priced on November 17th, with shares beginning to trade on both the New York and Toronto stock exchanges a day later. Former U.S. auto czar Steve Ratner had, last month, predicted the stock offering itself would be held on the 17th. (Click Here for that story.)
Sources tell TheDetroitBureau.com that two teams of top GM executives will begin fanning out, on Wednesday, to meet with potential investors. One will be led by former Wall Street analyst and now GM Vice Chairman Steve Girsky. New GM CEO Dan Akerson will reportedly shuttle between the two groups to help convince reluctant investors.