General Motors Co. is preparing for an initial public offering that would sell 20 percent of the U.S. Treasury's stake in the automaker and reduce the government to a minority owner, said two people familiar with the plan.
The aim is to sell a fifth of the government's 304 million shares, said the people, who asked not to be identified revealing private discussions. That would reduce the Treasury Department's stake to less than 50 percent from 61 percent now.
Final decisions on which owners will sell how many shares haven't been made and may change, the sources said.
A registration statement may be filed in August, aiming for a November stock sale, said four people familiar with the plan. The sale will probably raise $10 billion to $15 billion, depending on the company's performance, the strength of the economy, and the health of the IPO market, the people said.
An August filing means GM could have the IPO ready around the time of the Nov. 2 congressional elections. If the Treasury Department can sell enough shares, President Obama could help other Democrats running for office by arguing that his administration's restructuring of GM is paying off, said Joe Phillippi, president of AutoTrends Consulting.
"The government wants a successful offering soon so they can say that they took the company through bankruptcy, turned it over to independent management, and are taking it public," said Mr. Phillippi.
"This would be part of the campaign spin."
The automaker may also issue new shares to raise cash and sell shares owned by Canada and a union-led retiree health-care trust, one of the people said.
Selim Bingol, a GM spokesman, declined to comment.
GM has invited analysts, potential investors, and representatives of its current shareholders to Detroit for a review of the business onTuesday, said spokesman Renee Rashid-Merem.
GM will also give the members of the financial community a look at current and future models, she said.
The IPO will be managed by JPMorgan Chase & Co. and Morgan Stanley, people familiar with the matter have said. They will collect fees of 0.75 percent of the sale, said a person briefed on the matter. Such fees would be a quarter of the usual rate for large stock sales.
GM's equity is worth $70 billion, according to a May report by a JPMorgan debt analyst. Since 1999, four U.S. IPOs have exceeded $5 billion, topped by Visa Inc.'s $19.7 billion deal in 2008.
JPMorgan had offered to accept payment in equity instead of cash, though that idea was rejected by GM and the Treasury, two people said.
The United States will probably sell its GM stock over "a few years," Chief Financial Officer Chris Liddell said in a May 17 interview.