General Motors Co. has reported profits for the second successive quarter, and is widely expected to be on the brink of a landmark IPO which could raise as much as $16 billion to begin the process of releasing it from government ownership.
GM reported second quarter profits of $1.3 billion today, on revenues of $33.2 billion, bringing its half-yearly profits to a total of $2.2 billion on revenues of $64.7 billion. GM reported a first-quarter profit $1.07 billion in May, compared with a $5.98 billion loss a year earlier.
In the second quarter, GM’s North American operations earned $1.59 billion in profits before interest and taxes, a 32 percent increase from the first quarter’s $1.2 billion, but the company’s international operations declined, with Europe producing a $160 million loss.
General Motors Corporation filed for Chapter 11 bankruptcy protection on 1 June 2009, after losing $88 billion since 2004, the last year the company reported an annual profit. General Motors Co. was created 39 days later and has since received $50 billion in taxpayer support, leaving the government owning 61 percent of the company’s shares.
Several sources now report that an S-1 document containing over 500 pages could be filed with US Securities and Exchange Commission as early as tomorrow.
An IPO of this size would be the second most valuable in US history, after the $19.7 billion Visa IPO in March 2008.
Industry observers believe that GM’s intention is to sell a fifth of the government’s 304 million shares to reduce its holding to below 50 percent.
It is also understood that GM has secured a $5 billion revolving line of credit from a group of at least 15 banks, including Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America and Credit Suisse Group.
