GM ties up $5b bank deal

• Source: Global Times
• [07:59 August 13 2010]
• Comments

General Motors Co (GM) has secured a $5 billion credit facility, two people briefed on the bank deal said Wednesday, marking the return of the top US automaker to the capital markets a year after it emerged from a landmark bankruptcy.

GM plans to file a registration for its IPO today, two people with direct knowledge of the process said.

By securing the bank credit, GM cleared a hurdle toward an initial public offering of stock expected to make the US government a minority shareholder and hand the Obama administration an important political win against critics of its $50 billion bail-out of the automaker.

The GM IPO, expected to be the largest ever for the US market since Visa Inc's $19.7 billion offering in March 2008 and be an unprecedented privatization of an American industrial icon, is likely before the US Thanksgiving holiday, one of the sources said.

White House auto taskforce chief Ron Bloom and GM executives have said they expect an offering before the end of the year but have denied that the timing would be tied in any way to early November congressional elections.

GM Chief Executive Ed Whitacre said last week that he would participate in a roadshow intended to drum up investor interest in the stock offering in the coming weeks.

The now-completed GM credit facility includes tiered levels of commitments from Wall Street's largest banks, one of the sources said.

At the upper level, major US banks, including Bank of America Corp, Citigroup Inc, Goldman Sachs Group Inc, JPMorgan Chase & Co and Morgan Stanley, have each committed $500 million, the source said.

GM said Thursday that its profits hit $1.3 billion in the second quarter, as the auto firm prepares to break free of government ownership by re-listing on the stock exchange.

Seperately, Whitacre said Thursday he will step down as chief executive officer on September 1 and named board member Daniel Akerson as his replacement.

Agencies