GM unveils plan for initial offer of shares to public

DETROIT - General Motors Co. filed for an initial share offering that will mark the return of what was once the world's largest automaker to public markets a year after it was bailed out by the government.

GM, 61 percent owned by the U.S. Treasury, didn't disclose the number of shares that will be sold in the initial public offering or the price in a statement filed with the Securities and Exchange Commission.

The government will sell some of the common shares it owns in GM, according to the filing.

Outgoing Chief Executive Officer Ed Whitacre has pushed to end government ownership of GM, which received a $50 billion taxpayer bailout following its bankruptcy in June, 2009.

The Detroit company is seeking an IPO of as much as $16 billion, a person familiar with the plans said last week, as it tries to revive its unprofitable

European unit and rebuild U.S. brands that have lost market share in every year since 2002.

"It's important that they retake the legitimacy and prove that they can be a viable private company," said Peter Sorrentino, who helps oversee $13.3 billion at Huntington Asset Advisors in Cincinnati. "It eliminates a reason to say no to their product."

GM may hold the IPO in November, people familiar with the matter have said.

The aim is to sell a fifth of the Treasury's 304 million shares, people said in June, cutting the government's stake to less than 50 percent.

The Treasury said in a statement that it will retain the right to determine how much of the government's holding will be included in the initial sale.

"As much as Treasury should and will want a high price, Treasury will want these shares to trade well in the aftermarket so they can come back with offerings and continue to sell down their position," said Steven Rattner, former head of President Obama's Automotive Task Force.

A $16 billion IPO would be the second-largest in U.S. history behind Visa Inc.'s $19.7 billion deal in March, 2008, data compiled by Bloomberg show.

The filing comes after eight of the last nine American companies to complete their initial offerings took discounts to sell their shares, while 40 percent of the IPOs this quarter have left buyers with losses, data compiled by Bloomberg show.

GM's dominance of U.S. auto sales has shrunk since its market share peaked at 51 percent in 1962.

Since 2002, when the company's share of new vehicle sales in the United States was 28.4 percent, it's fallen every year to just 19.2 percent this year through July.

The last time GM accounted for a smaller share of new U.S. vehicle sales on an annual basis was in 1925, according to the Automotive News.

Mr. Whitacre, 68, said last week he would step down as GM's CEO on Sept. 1 and as chairman at the end of the year, ceding both titles to Dan Akerson, a managing director of the Carlyle Group.

The company last week reported second-quarter net income of $1.54 billion.

Profit rose 44 percent from $1.07 billion in the first three months of the year.

Revenue increased 44 percent from a year ago to $33.2 billion on growing sales of the Buick Excelle in China and Chevrolet Equinox in the United States.

The automaker's European operations continued to drag down its overall results with a $160 million loss. The unit lost $506 million in the first quarter.

General Motors Corp. filed for Chapter 11 bankruptcy protection on June 1, 2009, after posting $88 billion of losses since 2004, the last year the company reported an annual profit.

General Motors Co. emerged 39 days later.

GM's common shares will be listed on the New York Stock Exchange under the ticker GM and the Toronto Stock Exchange under a ticker yet to be determined.

The preferred shares will be convertible to common stock at a price that wasn't specified and are contingent on the completion of the common share sale.

The proceeds from the preferred sale will be used for general corporate purposes.

The preferred stock was added to attract hedge funds and other new investors because the shares have attributes of debt and equity, two people familiar with the plan said Wednesday.