Sources have revealed that General Motors (MTLQQ) will scoop out $10 billion from the stock market through its initial public offering (IPO) of common stock, to be held in November 18, 2010.

Each of the 365 million common shares that make up the IPO is expected to sell within $26-$29 range, higher than a forecasted price of $20 to $25, provided by then Chairman Ed Whitacre last month.

Post bankruptcy, GM is primarily owned by the U.S. and Canada governments, and by a trust fund providing medical benefits to United Auto Workers (UAW) retirees.

The U.S. government holds a 61% stake, the UAW union holds a 17.5% stake through its Retiree Medical Benefits Trust and the Canadian government holds 11.7%. The remaining shares went to the bondholders of the old company.

GM received $52 billion in U.S. Treasury (“UST”) loans by selling 61% ownership stake of the company and C$1.5 billion ($1.5 billion) in Export Development Canada (“EDC”) loans while going through the bankruptcy protection last year.

In April this year, GM repaid $8.1 billion of the loans to the governments of U.S. and Canada, ahead of the scheduled maturity date of July 2015. The repaid amount constituted $6.7 billion of UST loans as well as $1.4 billion in EDC loans that it had received last year.

The lion’s share of the $10 billion will be given to the U.S. government. As a result, the government’s ownership stake in the company will be reduced to 43%.

The IPO will also allow the stakeholders of the company to sell their stakes. The government would possibly recover its remaining investment in the company through several follow-up sales.

The sources also revealed that the Canadian government is expected to reduce its stake from 11.7% to 9.6%, while the UAW retiree health care trust would cut its stake from 17.5% to 15%.

Meanwhile, the company itself will sell $3 billion worth of preferred shares, the proceeds from which will be utilized for repaying loans and for pension payments. The preferred shares will be converted to common stock in 2013.

Once the IPO begins, GM will be listed in the New York Stock Exchange (NYSE). While filing the IPO in August this year, GM revealed its plan to list the shares on the NYSE under the ticker “GM,” the symbol under which it traded before going into bankruptcy. The automaker also plans to list the shares in Canada on the Toronto Stock Exchange, but the ticker symbol has not yet been determined.

GM’s IPO has been awaited for a long time. The company was desperate to shed its government ownership, which has been hurting its public image.

In the second quarter of the year, GM recorded a profit of $1.3 billion or $2.55 per share compared to a loss of 12.9 billion or $21.12 per share in the second quarter of 2009, when the automaker was in the midst of bankruptcy filing. The profit was attributable to the company’s aggressive cost reduction measures and streamlining of operations since its exit from the bankruptcy protection.

 
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