General Motors on road back to market

General Motors has filed for an initial share offering that will mark the return of what was once the world's largest carmaker to public markets a year after it was bailed out by the Government.

GM, 61 per cent owned by the US Treasury, didn't disclose the number of shares that will be sold in the initial public offering or the price in a statement filed with the Securities and Exchange Commission.

The carmaker will not sell any common shares itself while offering preferred shares alongside the IPO, the filing showed. The Government will sell some of the common shares it owns in GM.

Outgoing chief executive Ed Whitacre has pushed to end government ownership of GM, which received a US$50 billion taxpayer bailout after its bankruptcy in June 2009.

The Detroit-based company is seeking an IPO of as much as US$16 billion ($22.4 billion) as it tries to revive its unprofitable European unit and rebuild US brands that have lost market share in every year since 2002.

"It's important that they retake the legitimacy and prove that they can be a viable private company," said Peter Sorrentino at Huntington Asset Advisers in Cincinnati.

"It eliminates a reason to say no to their product."

GM may hold the IPO in November. The aim is to sell a fifth of the Treasury's 304 million shares, cutting the Government's stake to less than 50 per cent.

The Treasury said yesterday it will retain the right to determine how much of the Government's holding will be included in the initial sale.

"As much as Treasury should and will want a high price, Treasury will want these shares to trade well in the aftermarket so they can come back with offerings and continue to sell down their position," Steven Rattner, former head of President Barack Obama's Automotive Task Force, said.

A US$16 billion IPO would be the second largest in US history behind Visa's US$19.7 billion deal in March 2008, Bloomberg data shows.

The filing comes after eight of the last nine American companies to complete their initial offerings took discounts to sell their shares, while 40 per cent of the IPOs this quarter have left buyers with losses.

GM's past dominance of US car sales has shrunk steadily since its market share peaked at 51 per cent in 1962. Since 2002, when the company's share of new vehicle sales in the US was 28.4 per cent, it has fallen every year to just 19.2 per cent this year through July.

Whitacre said last week he would step down as chief executive of GM on September 1 and as chairman at the end of the year, ceding both titles to Dan Akerson, a managing director of the Carlyle Group. Akerson, 61, has been on GM's board since July 2009.

General Motors filed for Chapter 11 bankruptcy protection on June 1, 2009, after posting US$88 billion of losses since 2004, the last year the company reported an annual profit.

- Bloomberg