General Motors will file its initial public offering in mid-August and will likely sell about $3 billion of mandatory notes which will convert into stock shares in the future.
The Detroit motor company will take the proceeds from the IPO to repay its debt with the federal government to pay its pension liabilities. The IPO fling was initially expected to happen early this month. After getting out of Chapter 11 bankruptcy last summer, the company has been getting ready for a new IPO to once again become a publicly held firm.
General Motors is also trying to get a $5 billion line of credit with a number of financial service companies including Bank of America Corp (NYSE: BAC), JPMorgan Chase & Co. (NYSE: JPM), Morgan Stanley (NYSE: MS) and Citigroup, Inc (NYSE: C). Each bank has agreed to provide up to $500 million of credit for $2 billion while other banks are still working to help come up with funds to help the government meet its goal.
U.S. Treasury Secretary Timothy Geithner said that he hopes to recover most of the government’s money from the bailout.
During the first quarter, General Motors reported having $35.7 billion in cash and marketable securities and $14.2 billion in debt at the end of March. The company also has reported a $27 billion pension funding shortfall during the first quarter.
