GM Targets Stock Sale by July 2010, Year After Bankruptcy Exit

General Motors Co., the new automaker majority-owned by the U.S. Treasury, said it intends to make an initial public offering of stock by July 10, 2010, the one-year anniversary of its exit from bankruptcy.

The target date range for an IPO was given in a U.S. regulatory filing yesterday. GM and its government owners will take “reasonable best efforts” to sell shares within a year, dependent on market conditions, according to the filing.

“That would be the very earliest they could do it,” said Erich Merkle, president of Grand Rapids, Michigan-based consulting firm Autoconomy LLC. “A lot of it’s going to depend on where auto sales are and how many vehicles GM is producing.”

GM’s filing narrowed the timetable for a stock sale, after the Detroit-based company had said only that it was aiming for an IPO in 2010. Ron Bloom, the Treasury’s chief auto adviser, told reporters at an industry conference on Aug. 5 that he expected a sale by GM next year.

GM hasn’t specified how the proceeds of an IPO would be used, said Renee Rashid-Merem, a spokeswoman. The automaker filed for Chapter 11 bankruptcy on June 1 with $65 billion in U.S. aid.

While GM is now closely held, it will start releasing financial results after the third quarter, Rashid-Merem said in an interview. Yesterday’s filing summarized GM’s activities in the four weeks since leaving court protection, without financial data.

‘Remain Transparent’

The “disclosures are consistent with our commitment to remain transparent and to keep the public informed of our progress,” Chief Executive Officer Fritz Henderson said in a statement.

The Treasury owns 60.8 percent of GM, the successor to the former General Motors Corp. The other stakes are 17.5 percent for a trust for United Auto Workers’ retiree medical bills; 11.7 percent for the Canadian and Ontario governments; and 10 percent for Motors Liquidation Co., as the remnants of the old GM are now known.

Chrysler Group LLC, which also reorganized in bankruptcy court with U.S. aid, probably won’t have an IPO until 2011 or later, Treasury adviser Bloom said this week at the auto conference.

GM said it was authorized to issue 2.5 billion shares of common stock. “Only a portion of them would likely be issued if an IPO is launched,” Rashid-Merem said.

GM slid into Chapter 11 after losses of $88 billion since 2004, when the company last posted an annual profit. Henderson is facing a streak of monthly sales declines at the biggest U.S. automaker dating to October 2007. link.....