A GM sign is seen at a GM dealership in Miami, Florida August 12, 2010. [File photo: Xinhua/Reuters]
General Motors Co. (GM) on Wednesday announced that the price of common share in its initial public offering (IPO) has been set at 33 U.S. dollars, bringing the value of total common shares to 15.77 billion dollars.
The company also announced its plan to issue 4.35 billion dollars of mandatory convertible junior preferred stocks.
The value of GM's IPO amounts to 20.1 billion dollars in total, surpassing Visa's 19.7 billion dollars in its 2008 IPO to become the largest one in Wall Street history. If the overallotment options are exercised by underwriters, the total IPO will hit 23.1 billion dollars.
GM's common stock will begin trading on Nov. 18 in the New York Stock Exchange under the ticker symbol "GM" and on the Toronto Stock Exchange under the symbol "GMM."
"As we prepare to enter the equity markets, all of us at GM are excited about this historic milestone. We are especially appreciative of those who stood by us through the toughest times, and we are dedicated to creating value for all of our stakeholders, " said GM's Vice Chairman and Chief Financial Officer Chris Liddell.
The underwriters have a 30-day overallotments option to purchase up to 71.7 million additional shares of common stock from the selling stockholders, for a total of 2.37 billion dollars, and an additional 13 million shares of mandatory convertible junior preferred stock, for a total of 650 million dollars.
GM earlier expanded the common shares to 478 million shares from 365 million, excluding over-allotments, to feed huge demands. Previously, the company also increased the estimated IPO price range to 32-33 dollars per share, from 26-29 dollars.
"I believe the price of GM will be on the rising track in the long run thanks to its strong ability in new-car designing and large presence in the fast-growing emerging market," said Robert Stutz, managing director with Chicago's investment bank Kinsella Group.
Most of proceeds from the share offering will go to the U.S. government, which owns 61 percent of GM after restructuring the company in bankruptcy court in 2009. The government earlier planned to reduce its share to 43 percent without overallotment.
Badly shattered by the financial crisis, GM filed for Chapter 11 bankruptcy protection on June 1, 2009 and the U.S. government pipelined 49.5 billion dollars to the company, in exchange for a 61-percent stake and 2.1 billion dollars of preferred stocks.
But now, the reborn GM earlier reported 4 billion dollars of net profit in the first three quarters this year and sold 2 million vehicles in the fastest-growing China market in the period from January to November. Besides, the automaker has returned 9.5 billion dollars to the government, which seeks to recoup the rest in the next couple of years.
