DETROIT » General Motors Co. filed yesterday the first batch of paperwork required by regulators to sell stock to the public, a step that brings the automaker closer to its goal of shedding government ownership.
The 700-page registration form, filed with the U.S. Securities and Exchange Commission, begins a process that will lead to an initial public offering of GM’s stock. No date was set for the sale, but experts say the IPO could come as early as October.
Stakeholders in the company, including the U.S. Treasury Department, initially will sell common stock, while GM will sell preferred shares that are similar to bonds.
The forms did not say how many shares would be sold and it was unclear just how much stock the government wants to unload.
"Treasury will retain the right, at all times, to decide whether and at what level to participate in the offering," the department said.
GM, leaner and more efficient than it was before a stay in bankruptcy protection last year, earned $2.2 billion in the first half of this year despite depressed U.S. auto sales.
GM gave a lengthy list of risks facing the company, including growing competition, restructuring costs, and new laws and regulations. Most of the risk factors had been previously disclosed in regulatory filings with the government.
GM said that the company was dependent upon global car and truck sales and that "there is no assurance that the global automobile market will recover in the near future or that it will not suffer a significant further downturn."
The company said it had no plans to pay dividends on its common stock and future dividends would be determined by its board of directors.
The U.S. government owns roughly 61 percent of the company, which it got in exchange for giving GM $50 billion in survival aid last year. GM has repaid $6.7 billion, and the remaining $43.3 billion was converted to the ownership stake. Other stakeholders include a United Auto Workers health care trust and the Canadian government.
Government ownership has hurt the company’s public image and sales, CEO Ed Whitacre has said. He’d like to shed the derogatory nickname "Government Motors."
GM’s IPO would have to bring in $70 billion just to pay back all of GM’s stakeholders. The largest U.S. IPO so far is Visa Inc.’s 2008 offering that raised $19.7 billion.
The Detroit automaker’s recent profits come after it lost nearly $13 billion in last year’s second quarter alone.