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GM to be in charge of public stock offering, Treasury says

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GM to be in charge of public stock offering, Treasury says



WASHINGTON -- The Obama administration said today that General Motors would be in charge of major decisions about when and how it restarts selling shares to the public -- but said no such efforts would begin before October of this year.

The U.S. Treasury has been under pressure to both quickly sell its 60.8% stake in GM that it obtained in bankruptcy while earning back a large portion of the $50 billion it spent rescuing the automaker. GM CEO Ed Whitacre has said he wants to pay back all of the government's investment if possible.

GM and the Treasury have been conducting a search for the Wall Street bank that will manage the IPO, which may be one of the largest such sales ever. Treasury said that while the sale will likely include shares from GM, itself and other shareholders, the size and exact participants have not been determined.

The selection of the lead underwriters will be made by GM, “subject to Treasury’s agreement that the selection is reasonable,” the agency said in a statement. "Treasury will determine the fees to be paid to the underwriters."

Analysts have estimated that GM's shares could be worth between $40 billion and $60 billion once the IPO launches. But GM executives have said the company must clear several hurdles before any share sale, including a few quarters of profits and sorting out a long-term answer for a financing arm, which could entail either buying back portions of the old GMAC or setting up a new company.



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