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GM files for landmark IPO

US auto giant General Motors on Wednesday took the first step to selling shares to the public, seeking to free itself from government control after pulling back from the abyss of bankruptcy.

business Updated: Aug 19, 2010 03:55 IST

US auto giant General Motors on Wednesday took the first step to selling shares to the public, seeking to free itself from government control after pulling back from the abyss of bankruptcy.

Filing for what may be one of world's largest initial public offerings (IPO) of shares, GM did not disclose the number of stocks that will be offered or the price range.

But the market expects GM to raise between 12 and 16 billion dollars, with the potential to be the second largest IPO in US history, after the credit card giant Visa, which raised more than 19 billion dollars in March 2008.

In the filing Wednesday with the US Securities and Exchange Commission, GM said it planned to apply for listings on the New York Stock Exchange and the Toronto Stock Exchange.

"The amount of securities offered will be determined by market conditions and other factors at the time of the offering," GM said in a statement.

"The number of shares to be offered and the price range for the offering have not yet been determined," it added.

The Treasury Department said separately it "will retain the right, at all times, to decide whether and at what level to participate in the offering."

The IPO filing came nearly a week after the company announced a 1.3 billion dollar quarterly profit. The stock sale is expected to take place late this year.

Company executives have said for several months they were planning to re-float GM, as the biggest US automaker sought to repay its debt to the government, which bailed it out from bankruptcy during the financial crisis.

An IPO will allow the US Treasury to begin offloading the 61 percent stake it holds in GM after last year's 50 billion dollar US bailout of the carmaker.

GM said the public share offering would include preferred shares as well as common stock.

But the Treasury pointed out that the offering would not include 2.1 billion dollars in preferred GM shares that it owned, which are in addition to the common shares representing the 61 percent stake.