After its execution, GM”s planned IPO should leave the U.S. government with a minority stake in the bailed out automaker. The U.S. Treasury, the entity which actually “˜owns” the government”s stake, plans to sell about 20% of its stake in the IPO, said two sources close to the situation. Such a sale would bring the government”s stake down to 49%, before accounting for any further dilution caused by any issuance of new shares.
In a presentation today before potential investors and analysts in Detroit, Ed Whitacre will be talking about GM”s plan to issue new capital in the offering, in order to address one area of the balance sheet not acknowledged by the government bailout; the $27 billion shortfall in pension funding.
Whitacre and company are expected to address a lot more than just the balance sheet. Their future plans for growth and expansion into emerging markets is also a white-hot issue.
– By: Stephen Calogera
Source: Automotive News (Subscription Required)