GM IPO story updated with additional filing details.
) -- The GM symbol is headed back to the New York Stock Exchange.
said Wednesday that it has filed for an IPO registration with the Securities and Exchange Commission. Shares will be listed on the NYSE and on the Toronto Stock Exchange.
GM said some shareholders will sell common stock while the company will issue convertible junior preferred stock. The number of shares to be offered and the price range have not been determined; they will be subject to market conditions at the time of the offering. Once the IPO is completed, 500 million shares of GM will be outstanding, many held by their current owners. Currently, no dividend is planned for the common shares.
The Treasury Department, currently the largest holder with 61% of the shares, said Wednesday that it has agreed to be named as a selling shareholder of common stock and will decide later how much to sell. Treasury also holds $2.1 billion of Series A preferred stock, which will not be included in the IPO.
In the S1 filing, GM noted that as of June 30, it had $31.5 billion in liquidity and debt of $8.2 billion. The second-largest automaker in the world, GM sold 7.5 million vehicles in 2009, generating revenue of $104.6 billion.
The company listed a wide variety of risk factors, including its dependence on fluctuating auto sales, the necessity for consumer acceptance of its new vehicles, the need to continually reduce costs as well as reliance on suppliers who could fail, on a continuing supply of raw materials and on continuing adequate cash flow.
Additionally, "We operate in a highly competitive industry that has excess manufacturing capacity and attempts by our competitors to sell more vehicles could have a significant negative impact on our vehicle pricing, market share, and operating results," GM said.
and CFO Chris Liddell, on the job since early this year, are both from
, and "the ability of our new executive management team to quickly learn the automotive industry and lead our company will be critical to our ability to succeed," said GM.
GM also noted that its pension is underfunded and it maintains an obligation to contribute further to its employee health care trust fund. Another problem is that "we have determined that our disclosure controls and procedures and our internal control over financial reporting are currently not effective," GM said. "The lack of effective internal controls could materially adversely affect our financial condition and ability to carry out our business plan." Remedial steps are still being tested.
The automaker listed its strengths, too, which include its global presence comprised of a worldwide sale and dealer network, a strong market share in emerging markets like China and Brazil, a portfolio of high-quality vehicles, a commitment to developing new technologies and a competitive cost structure in North America.
Despite all the hoopla surrounding the IPO, analyst Casey Thormahlen of research firm IBISWorld in Los Angeles said he is bearish on the outlook for GM because its market share has been sliding for decades.
"GM is outshone by
and other automakers," Thormahlen said. The four core brands retained by GM may be doing relatively well, but overall, "Ford is gaining market share while GM has lost market share," he said. "On the fundamentals, Ford is a better buy."
GM filed for bankruptcy in June 2009 and emerged in July. The government is the biggest owner of the company's shares because it provided $7 billion in direct loans and a $43 billion bailout to the company. GM has repaid the direct loans and the majority of the bailout is expected to be repaid as the Treasury Department sells off its shares, starting with the IPO.
Nine leading Wall Street firms including
Bank of America
will be joint managers for the offering.
A preliminary prospectus can be viewed at http://www.sec.gov.
-- Written by Ted Reed in Charlotte, N.C.