General Motors plans $20bn flotation


More than a year after declaring itself bankrupt, US carmaker General Motors (GM) is planning an initial public offering (IPO) - which is set to be the second largest share sale in US history.

The company has filed an official application (called an S-1 document) with the Securities and Exchange Commission.

According to analysts, the move will raise between $12 billion and $16 billion (£7.7-£10.2 billion).

GM, which owns brands such as Chevrolet, Cadillac, Vauxhall and Opel, was bailed out by the Government last year.

The global economic downturn resulted in a slump in demand for big-ticket items, such as cars and this affected carmakers worldwide with many cutting back on production, slashing jobs and seeking funding to see them through the downturn.

GM declared itself bankrupt in June last year and this symbolised the largest collapse of an industrial company in US history.

The US car giant received $50 billion in aid from the US Government to prevent it from collapse, which meant it was 61%-owned by the state.

However, the flotation could reduce this to below 50%.

The announcement comes just a week after GM posted second-quarter profits of $1.6 billion (£1 billion) - its largest profit in six years.

In related news, GM’s chief executive, Edward Whitacre, recently announced he would step down and hand over to current board member Dan Akerson, but will stay on as chairman until the end of the year.

Tags: , , General Motors, GM, IPO, , Securities and Exchange Commission

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