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Wednesday, November 17th, 2010

GM Boosts Share Offer to Raise Up to $18bn

Author:    
Source:     BBC News (U.K.)
Publication Date:     16 November 2010 Last updated at 15:07 ET
 Link: GM Boosts Share Offer to Raise Up to $18bn
Stephan:   I supported the bailout of GM because it meant the continuation of thousands of jobs, and I felt new people would have to come into management. If that happened the money would be a good investment. And thus it is proving. We need to make things here. This can be accomplished by changing the tax code which presently rewards moving offshore. Additionally, we need to rebuild our infrastructure, and the money to do this should come out of the defense budget. We spend more than the rest of the world combined on 'defense.' At the same time short of an active combat region, as anyone will tell you who travels aboard, the U.S. is the society with the highest fear factor. What does that tell you?

The US car giant General Motors (GM) says its offer of shares to the public could raise $18bn (£11.3bn), $5bn more than first hoped.

Investor interest in the sale means demand has rocketed and increased the price the company can charge.

The company is currently more than 60% owned by the US government which is keen to return it to the market.

It plans to sell 365 million common shares for up to 18% more than first estimated at a price of $33 each.

It will also now offer $4bn in preferred stock – four times the original value planned.

Preferred stock carries different rights and will help to pay off the company’s pension debt – one of the concerns of potential investors in the share sale.

According to the Reuters news agency, a price for the common stock of $33 per share would give GM a market value of about $63bn – close to the $66bn value that GM needs in order for US taxpayers to break even, based on the US Treasury’s remaining common stock holding and a share price projection by the Treasury’s special inspector general.

The stock is expected to begin trading on the New York and Toronto stock exchanges on Thursday.

The company […]

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