GM Michigan plans to file an almost $20 billion initial public offering next month, instead of July as initially reported.
Online PR News – 08-July-2010 – – DETROIT, M.I. – GM Michigan plans to file its initial public offering during the middle of next month (August 2010) according to Reuters. The news service agency reported unnamed sources who contradicted previous reports by news outlets that GM would file in July.
GM Michigan owners should know GM has been discussing a $5 billion revolving credit line with several banks. So far Bank of America Corp, Citigroup, Inc., and JP Morgan Chase & Co and Morgan Stanley arranged to supply $500 million of credit each.
The IPO will be made once the credit line is completely secured. Approximately $3 billion worth of mandatory notes will be sold off by GM during the IPO, and the notes will eventually change into shares at a later date. The profits will be used by GM to repay government debt and pension liability.
The U.S. Treasury plans to sell approximately $10 billion to $12 billion of its stake in the GM Michigan company, reducing its total ownership from 61 percent to 41-37 percent.
If the IPO goes forward at its current numbers, it will be the largest IPO seen in the U.S., topping the March 2008 IPO made by Visa Inc., which totaled $19.7 billion.
June auto sales numbers have indicated a slowdown in auto sales compared with last month’s (May 2010) results. It’s unknown if the automaker held back the IPO because of June’s numbers, though it’s more likely due to time needed to secure the $5 billion revolving credit line.
Check back with http//www.miautotimes.com for more updates as they become available.
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[Source(s): Reuters, American Banking News]