As widely expected, General Motors has filed papers with the Securities and Exchange Commission as the first step towards an initial public offering (IPO) which is expected to be one of the largest in US history.
A GM IPO is expected to raise anything between $12 billion and $20 billion. The record for the largest IPO is currently held by Visa, which raised $19.7 billion in 2008.
The US government currently owns 61 percent of GM after handing the automaker a $50 billion bailout last June when it filed for bankruptcy protection. The IPO will help to remove the tag of Government Motors which GM has worn uncomfortably since.
The 700-page filing of the IPO paperwork follows almost a week after GM reported second-quarter profits of $1.6 billion, its biggest profit in six years. The share sale is expected to take place later this year.
GM, the biggest US automaker, said it would apply for listings on the New York and Toronto stock exchanges, but did not say exactly how many shares it would sell. "The amount of securities offered will be determined by market conditions and other factors at the time of the offering," the company said in a statement. "The number of shares to be offered and the price range for the offering have not yet been determined."
Analysts have suggested that the US Treasury may sell about a fifth of its 304 million GM shares, reducing its stake to under 50 percent. GM has already repaid $8.4 billion worth of loans to the US and Canadian governments.
News of the IPO also comes a week after GM's chief executive, Edward Whitacre, announced his resignation. He will hand over to current board member Dan Akerson on 1 September, but will stay on as chairman until the end of the year. Whitacre joined GM in July last year to help restructure the company and prepare its return to full private-sector ownership. Akerson will become GM's fourth chief executive in 18 months.
GM has cut more than 65,000 jobs in the US in the last year, and has closed factories in an attempt to cut costs. It has also sold its Saab brand and ditched Pontiac, Saturn and Hummer. It has retained its European brands, Opel and Vauxhall, but is expected to cut production and shed jobs.
The IPO will cause rejoicing among Democrats in Washington, who will see it as a boost to their prospects in the mid-term congressional elections in November.
