GM files plan for stock offering

General Motors Co., moving to unwind itself from government control, on Wednesday filed plans to go public and begin selling common shares as early as this fall.

The filing--anticipated for weeks--came just 13 months after GM was restructured in bankruptcy with $50 billion in direct aid from the U.S. government.

GM said the amount of securities offered will be determined by market conditions and other factors at the time of the offering. GM hopes to raise $12 billion to $16 billion with the stock sale, Bloomberg News reported, making it among the biggest initial public offerings ever.

Bloomberg, which acquired a draft of the prospectus, said GM may also issue preferred shares to make the offering appeal to a wider group of investors, including hedge funds.

In the filing, GM said weak sales and underfunded pensions pose risks for the automaker.

The success of the IPO will go a long way in determining how much money American taxpayers will recover from their 61 percent stake in the automaker. Bloomberg said GM wants to sell a fifth of the government's 304 million shares. After the sale, the government's stake in GM is expected to drop below 50 percent.

In addition to the federal government, a UAW retiree health-care trust controls 17.5 percent of GM. Other stakeholders include the Canadian government, with 11.7 percent, and former GM bondholders, with 9.8 percent.

In its statement, GM said the common shares would be sold by "certain stockholders."

In recent weeks, President Obama has pledged the government will recover all the taxpayer money his administration provided to bail out the auto industry last year.

For the government to recoup its full investment, GM's market value must reach $70 billion--or 10 times the automaker's market capitalization before it sought bankruptcy protection in June 2009.

By David Phillips- Automotive News