Demand sees GM expand IPO by 31%

• Source: Shanghai Daily
• [15:04 November 18 2010]
• Comments

Just a day before its historic return to the New York Stock Exchange, General Motors Wednesday announced that it would expand its initial public offering of common shares by 31 percent.

The Detroit company, responding to higher-than-expected demand for its shares, said it will raise the size of its IPO to 478 million common shares from the previously announced 365 million shares.

Most of the common stock will be sold by the United States government, which is trying to unload what is now a 61 percent stake in the country's largest auto maker.

The shares already are spoken for, with investment banks closing the books on orders late Tuesday, according to a person briefed on the sale, who asked not to be identified because he is not authorized to speak publicly about the offering.

The Obama administration now will sell 412 million of its 912 million shares, raising around $13.6 billion that will help the government get back some of the $50 billion it loaned GM to save the company from ruin last year.

GM said the common shares will be between US$32 and US$33 each. GM itself is not selling any common stock, but is offering up to $4 billion worth of preferred shares at $50 each.

Including the preferred shares, the auto maker's IPO could be the largest in history for a US-based company, and it may even grow to be the largest in the world.

The shares will trade in New York Thursday.