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GM calls a financial summit in preparation for IPO

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GM calls a financial summit in preparation for IPO

Robert Snell / The Detroit News

General Motors Co. has invited financial analysts, potential investors and other members of the financial community to Warren next week to review its business performance ahead of an initial public stock offering expected late this year.

The June 29 meeting at GM's Technical Center will focus on the automaker's progress since emerging from bankruptcy last summer.

GM will provide updates from each of its four global regions. Vice Chairman and Chief Financial Officer Chris Liddell will host the meeting, and Vice Chairman Steve Girsky will talk about the new GM.

Tom Stephens, vice chairman of global product operations, will review fuel economy and technology improvements.

The meeting comes as GM prepares to file, as early as next week, a detailed statement outlining its proposed initial public offering that will reduce the U.S. government's 60.8 percent stake in the company. The sale could take place before the November election.

"It's been a while since we've engaged with this community," GM spokeswoman Noreen Pratscher said.

An IPO will allow GM to again be a publicly traded company, the first step toward the government selling its ownership stake.

Bloomberg News, citing unidentified sources, reported Wednesday that GM. is preparing to sell 20 percent of the Treasury's 304 million shares, which would reduce its stake to below 50 percent.

Final decisions on which owners will sell how many shares haven't been made and may change, Bloomberg reported.

Some Wall Street analysts predict the government will sell a third of its stake -- roughly 100 million of its 500 million GM shares -- in an initial sale.

That first sale could raise between $10 billion and $15 billion or more, which would put it among the three largest IPOs in history.

One Treasury official said a GM stock sale could raise more than $20 billion and become the largest IPO in history.

Members of the financial community also will test drive GM vehicles during the meeting.

Also Wednesday, GM said it is in talks with financial institutions to provide more loans and leases for customers with bad credit -- a move that could boost sales and market share.

The discussions mean GM is less likely to try buying back part of its former GMAC financing unit, now called Ally Financial Inc., or create its own finance division.

"We are developing relationships with other financial sources on a selective basis for specialized financing needs, such as leasing and sub-prime financing," GM spokesman Tom Wilkinson said.

Next week's get-together in Warren could be timed to coincide with GM filing the IPO registration statement, speculated auto analyst Joe Phillippi of AutoTrends Consulting in Short Hills, N.J.

"It's about spin," Phillippi said. "GM wants to get its story out. This is the first go-'round with the road show."

The registration statement also will announce that Morgan Stanley and JPMorgan Chase & Co. will be lead underwriters for the sale of part of the government's stake.

The registration statement will include detailed financial information about GM.

It also will likely indicate how much stock the government is willing to sell, and how many shares can be sold to the underwriters, which can profit by selling them.

From The Detroit News: http://detnews.com/article/20100624/AUTO01/6240349/1148/auto01/GM-calls-a-financial-summit-in-preparation-for-IPO#ixzz0rm7zWiol

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GM readies IPO filing, in auto loan talks

by Reuters | Posted yesterday at 2:27 p.m.

General Motors Co is planning to file a statement outlining its plan for a public offering of its stock in July for a listing that could raise up to $20 billion, a person with knowledge of the preparations said Wednesday.

In addition, GM is in talks with JPMorgan Chase and Wells Fargo on deals aimed at providing improved access to consumers for auto loans at its U.S. dealerships, two people with knowledge of those talks said.

The sources were not authorized to discuss the still-confidential negotiations and asked not to be named.

GM now expects to raise $15 billion to $20 billion in its IPO, according to one of those with knowledge of the early-stage work ahead of a filing with U.S. securities regulators.

That projected range reflects stronger anticipated investor demand for the restructured automaker, the person said.

GM Chief Executive Ed Whitacre and other executives have said they favor an IPO as early as this year. Bankers had expected a stock listing to raise between $10 billion to $20 billion by selling part of the U.S. government’s 60.8 percent stake in GM to investors.



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GM ready to move on IPO soon

Automotive News Europe -- June 24, 2010 06:01 CET

DETROIT (Bloomberg) -- General Motors Co. is preparing for an initial public offering that would sell 20 percent of the Treasury's stake in the automaker and reduce the U.S. to a minority owner, said two people familiar with the plan.

The aim is to sell a fifth of the government's 304 million shares, said the people, who asked not to be identified revealing private discussions. That would reduce the Treasury Department's stake to less than 50 percent from 61 percent now. Final decisions on which owners will sell how many shares haven't been made and may change, the people said.

A registration statement may be filed in August, aiming for a November stock sale, said four people familiar with the plan. The sale will probably raise $10 billion to $15 billion, depending on the company's performance, the strength of the economy and the health of the IPO market, the people said.

An August filing means GM could have the IPO ready around the time of the Nov. 2 congressional elections, said the people. If Treasury can sell enough shares, President Barack Obama could help other Democrats running for office by arguing that his administration's restructuring of GM is paying off, said Joe Phillippi, president of AutoTrends Consulting.

“The government wants a successful offering soon so they can say that they took the company through bankruptcy, turned it over to independent management and are taking it public,” said Phillippi, who is based in Short Hills, N.J. “This would be part of the campaign spin.”

The automaker may also issue new shares to raise cash and sell shares owned by Canada and a union-led retiree health-care trust, one of the people said.

Selim Bingol, a GM spokesman, declined in an e-mail to comment on the matter.

GM has invited analysts, potential investors and representatives of its current shareholders to Detroit for a review of the business on June 29, said a spokeswoman, Renee Rashid-Merem. GM will also give the members of the financial community a look at current and future models, she said.

The IPO will be managed by JPMorgan Chase & Co. and Morgan Stanley, people familiar with the matter have said. They will collect fees of 0.75 percent of the sale, said a person briefed on the matter. Such fees would be a quarter of the usual rate for large stock sales.

JPMorgan had offered to accept payment in equity instead of cash, though that idea was rejected by GM and Treasury, two people said.

The U.S. will probably sell its GM stock over “a few years,” CFO Chris Liddell said in a May 17 Bloomberg Television interview.

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100624/COPY/306249989/1317#ixzz0rmcleOHS

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