Potential overseas investors could be involved in General Motors’ initial public offering (IPO) as it looks to exit from the US Department of the Treasury’s US$50bn bailout.
GM secured American taxpayers’ money in a deal agreed under the Emergency Economic Stabilisation Act in 2008, but the government has indicated its willingness to end its involvement as soon as possible.
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And while not naming foreign investors or their country of origin, a statement from the Treasury notes: ” We expect potential investors will be sought across multiple geographies with a focus on North American investors, in line with what is typical in similar transactions.”
Widespread media speculation has centred on comments apparently made by SAIC Motor Corporation chairman Hu Maoyuan, that it could consider taking a stake in GM.
Reports quote Maoyuan as saying: “”GM is our important strategic partner. We are not clear about the details of its IPO. We will make the right decision once we know details.”
Any potential sale to a Chinese company could be fraught with political difficulties, but the US Treasury added it had a duty to maximise the return to taxpayers.
“We expect a large and diverse group of institutional investors will be offered an opportunity to participate, with no single investor or group of investors receiving a disproportionate share or unusual treatment,” it noted.
“We expect interested retail purchasers will be given ample opportunity to participate, consistent with appropriate commercial practices aimed at maximising our return and creating a stable trading market for the shares.”
The Treasury was keen however, to distance itself from any direct involvement in the process, content to monitor the procedure from a distance.
“US Government will not involve itself in decisions regarding allocation of shares to specific buyers,” it added.
Last week new GM CEO Dan Akerson said the automaker was aiming to repay the US$50bn taxpayer bailout during “the next couple of years.”
SAIC could not immediately be reached for comment.
