TORONTO — General Motors Co. will trade its shares on the main market in Canada as well as in the United States, the company said as it took the first step needed to sell its stock to the public and liberate itself from the moniker of “Government Motors.”
“We intend to apply to have our common stock listed on the New York Stock Exchange and the Toronto Stock Exchange,” the company said in its registration statement, filed with the U.S. Securities and Exchange Commission on Wednesday.
The 700-page registration form begins a process that will lead to an initial public offering of GM’s stock. No date was set for the sale, but experts say the IPO could come as early as October.
Stakeholders in the company, which include the U.S., Canadian and Ontario governments, will initially sell common stock, while GM will sell preferred shares that are similar to bonds. The forms did not say how many shares would be sold or at what price.
Speculation has put the offering price of GM’s shares as high as US$100, said Tony Faria, co-director of the automotive research centre at the University of Windsor.
“(This) seems astounding given that you can buy a share of Ford right now for about $13 and Ford did not go into bankruptcy,” Faria said.
GM delisted its shares from the New York Stock Exchange in early 2009 when the company began a massive reorganization under Chapter 11 bankruptcy protection in the United States.
As part of its restructuring, the company accepted billions of dollars in aid from the American, Canadian and Ontario governments. In exchange, Ottawa took an eight per cent stake in the automaker and Ontario took another four per cent after they together lent it C$10.5 billion. About $9 billion of that loan was converted to equity when the so-called “new GM” emerged from bankruptcy protection, while the rest has been paid back.
Federal Finance Minister Jim Flaherty said Ottawa hasn’t yet decided when it will sell its stake in the company.
“Canada may participate in an initial public offering by General Motors, but any decision we take is with the goal of maximizing the return for taxpayers while reducing our ownership in the company as quickly as is appropriate,” Flaherty said in a statement Wednesday.
A GM IPO could be the largest in U.S. history. It would have to bring in US$70 billion to pay back all of GM’s stakeholders. That would be more than Ford’s market value of roughly $44 billion, but less than Toyota’s total market value of about $113 billion. The largest U.S. IPO so far is Visa Inc.’s 2008 offering that raised $19.7 billion.