General Motors set the terms of its initial public offering Wednesday, boosting shares on offer as expected in what could be the largest US IPO ever.
AP
General Motors world headquarters, Detroit, Michigan
GM will sell 478 million shares between $32 and $33 a share, the automaker said in a Securities and Exchange Commission document filed Wednesday.
At the high end of its price range, the IPO could be the largest ever in the United States -- and a major first step toward break-even for a $50 billion U.S. government bailout of the 102-year-old company.
The automaker had initially filed to sell 365 million shares for $26 to $29 each and $3 billion worth of preferred shares, but upped the terms in the face of robust demand.
If the underwriters exercise an overallotment provision, the IPO could raise $18 billion in common stock and $4.6 billion in dividend-paying preferred shares in GM.
GM, which lost $88 billion from 2005 through just before its 2009 bankruptcy, earned a $4.1 billion net profit in the first nine months of the year and is on track for its first full-year profit since 2004.
The New GM
GM has said it can now break even at U.S. industry auto sales as low as 10.5 million vehicles. That means the restructured GM would have made money in 2008 when the old GM lost $31 billion.
Based on a diluted share count of 1.9 billion, $33 per share would give GM a market value of about $63 billion.
That approaches the roughly $66 billion value that GM needs in order for U.S. taxpayers to break even, based on the U.S. Treasury's remaining common stock holding and a share price projection by the Treasury's special inspector general.