GM launching IPO, ending govt majority stake
Updated: 2010-11-18 14:41
DETROIT - General Motors is returning to life as a public company Thursday with a stock offering worth potentially $23 billion, ending the government's role as majority shareholder and closing a remarkable chapter in American corporate history.
The US government should make about $13.6 billion when GM shares start trading on the New York Stock Exchange. The federal Treasury is unloading more than 400 million shares of GM, reducing its stake in the company from 61 percent to about 33 percent.
Together, the sale of common and preferred stock will bring the deal's value to a record $23.2 billion.
The stock offering is the latest in a series of head-spinning developments over the past two years for an American corporate icon.
In September 2008, to mark its 100th birthday, the automaker celebrated in the grand three-story atrium on the ground floor of its Detroit headquarters.
Two months later, then-CEO Rick Wagoner found himself in front of members of Congress, begging for money to keep GM alive. Four months after that, he was ousted by President Barack Obama.
By June 2009, GM had filed for bankruptcy. It emerged relieved of most of its debt but mostly owned by the government and saddled with a damaging nickname: "Government Motors." The value of its old stock was wiped out, along with $27 billion in bond value.
Now GM will become a publicly traded company again and revive the stock symbol "GM." Dan Akerson, GM's fourth CEO in two years, will ring the opening bell Thursday on the New York Stock Exchange, to celebrate the company's rebirth.
Obama on Wednesday said GM's IPO marks a major milestone not only in the turnaround of the company, but of the US auto industry as a whole.
"Supporting the American auto industry required tough decisions and shared sacrifices, but it helped save jobs, rescue an industry at the heart of America's manufacturing sector, and make it more competitive for the future," he said.
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