GM roars back to public market

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General Motors returned to life as a public company Thursday with a stock offering worth potentially $23-billion (U.S.), considerably more than anticipated when the largest U.S. automaker began preparing for its IPO.

 The stock started public trading above the IPO price. In New York, the stock was at $35.72 (U.S.) and in Toronto they were at $35.84 (U.S.) shortly after the markets opened Thursday.

GM set a price of $33 per common share on Wednesday, at the high end of a range and a day after it raised the number of shares it will offer to satisfy investor demand.

The U.S. government, the Canadian federal and Ontario governments and other owners will raise a total of $18.2-billion by selling at the IPO price. GM will raise another $5-billion by selling 100 million preferred shares at $50 each.

The U.S. Treasury is unloading more than 400 million shares of GM, reducing its stake in the company from 61 per cent to about 33 per cent.  The stock sold through the IPO would be worth about $13.6-billion.

Canada’s federal and Ontario governments have owned a combined 11.67 per cent of General Motors since last year’s bailout of the automaker. They’re reducing that stake to below 10 per cent by selling about 35 million shares through the IPO.
Canadian Industry Minister Tony Clement and Finance Minister Jim Flaherty have said they’re in no hurry to sell more GM shares at this time, since they been advised that the stock may be worth more in future.

The head of GM Canada’ largest union, CAW national president Ken Lewenza, said Thursday he supports the idea of having a continuing government role in the auto sector.

“We would encourage the Canadian government to take their time,” Lewenza said in an interview with BNN, a specialty business cable channel.

“In fact, we would encourage the Canadian government to do what other countries are doing, like in China and Korea, and have some stake in the automobile industry.”

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