General Motors Co. might sell more shares than initially planned in its first public offering, at a price higher than expected, because of strong investor demand, a senior manager said Friday.
General Motors Corp.'s world headquarters is seen along the Detroit River in Detroit, Michigan in this November 18, 2008 file photo. The agenda for GM remains dominated by the U.S. election cycle as the automaker reaches the final stage of preparation for an initial public offering.
GM set a proposed range of 26 to 29 U.S. dollars per share for 365 million shares of common stock. At that range, the sale would generate between 9.5 billion and 10.5 billion dollars.
The sale, which GM executives have promoted this week in meetings with large investors, is oversubscribed - meaning that demand is exceeding the number of shares that were to be offered, the officer briefed on the matter said.
To meet the higher demand, GM's underwriters have the option to increase by 15 percent the number of common and preferred shares available at the offering price. As a result of the additional shares, the sale may top 15.6 billion dollars.
The share price will be set late Wednesday, and could top 30 dollars. The stock is set to start trading on the New York Stock Exchange Thursday, according to Detroit News.
The U.S. government plans to sell about one-third of its 61-percent stake in the auto maker, which it got during the federal bailout of GM, reducing its share to 43 percent. If the underwriters choose to sell more shares, the government's stake could drop even lower.
The United Auto Workers health care trust fund plans to sell about 2 billion dollars in stock and the Canadian and Ontario governments plan to sell about 1 billion dollars.
