We reported earlier that General Motors (GM) wanted to increase its preferred stock by 30 percent, this would have worked out to $15.5 billion. However, the underwriters agreed to increase the size to $4.4 billion. The IPO now stands at $33 per share, which is expected to raise $20.1 billion.
The Wall Street underwriters finally set the price on 478 million GM common shares. If bankers decide to sell more securities, then this could increase common shares by another 71.7 million. Most of the income earned by this IPO will go to the U.S. Treasury, as it was their money that helped bail out the Detroit automaker.
Currently the treasury owns 61 percent of GM, so both parties are eager to dramatically reduce this. According to a WSJ article General Motors has already given back $9.5 billion, that’s a long way of the $49.5 billion that was given to them, which had stopped them from going bankrupt.
GM has been in close contact with the Obama administration, briefing them all the time about what they plan to do to pay back the rest of the funds. It is no secret that this is an issue that needs to be resolved, but at least the automaker has been paying back some of the money, and plans to pay the loan in full in the not to distant future.