Chillin' out till it needs to be funded
General Motors with a 61% stake from the Treasury/Government is being readied for an IPO with its 12% market share and sales of less than 150k cars a month. The 61% stake would be hard to let go but the public bandying of $300M as underwriting fee[reuters] being split by Lead Investment Bankers JP Morgan and Morgan Stanley makes it
a. likely that a substantial stake will be divested before the congressional elections and the holiday season.
b. likely that underwriting fees would start going at a discount if ever the retail markets regain the confidence and the appetite.
Banks were asked questions on their strategy for the IPO, including how much stock they recommend selling, how much GM may be worth and what obstacles may emerge along the way, one of the people said.
Whitacre wants to secure an automotive lending unit before a public offering in the fourth quarter, people familiar with the plan have said. Detroit-based GM hasn’t had such a subsidiary since former CEO Rick Wagoner sold 51% of GMAC to private-equity firm Cerberus Capital Management LP in 2006.
Whitacre was installed as chairman by President Barack Obama’s automotive task force when it replaced more than half of the directors in July.
Choosing a lead underwriter in the next week or two would allow GM to file an S-1 initial registration form by July and sell shares in October or early November, one of the people said.
The Treasury has hired Lazard Ltd. for $500,000 a month to advise on selling its stake, according to a document on the Treasury’s website. The Treasury Department has about $40 billion of its $50 billion investment in GM tied up in the company’s equity.
Also May Auto sales [Domestic Light Vehicles] are regaining the uptrend and likely to close at 9 million later in the day. Trucks already make 55% of tht number and imports are likely to add a regular 3 million units..