GM files for IPO and plans dual listing
By Clare Baldwin and David Bailey
NEW YORK/DETROIT (Reuters) - General Motors Co GM.UL took a big step toward repaying a controversial taxpayer-funded bailout by declaring plans for a landmark stock offering that represents a critical test for the Obama administration.
The automaker said it planned to list the shares on the New York Stock Exchange and the Toronto Stock Exchange in an initial public offering that comes amid a still-weak global market for cars that is vulnerable to a further downturn.
The Obama administration wants to be able to cast its $50 billion GM bailout as a financial success in the face of public skepticism and Republican political opposition but some analysts are still wary of the offering.
GM's IPO could be the biggest since Visa Inc's V.N $19.7 billion March 2008 offering, and could raise up to $20 billion, though analysts cautioned that its size depends on still-untested investor demand for a restructured automaker with only two consecutive quarters of profits.
GM's initial filing with U.S. securities regulators did not say how many shares would be sold or give an expected price range for the IPO.
"We're looking at a second half that is potentially weaker than the first half," said Dennis Virag, president of Automotive Consulting Group. "That could certainly hurt the sale of the shares."
"I don't think this is a good time to be going public," Virag said. "It's more political than practical."
Trading in GM shares is expected to start between late October and the U.S. Thanksgiving holiday on November 25, according to people involved in the process. A stock offering in late October would mean trading would start just before the November congressional elections. Continued...