General Motors Co CEO Ed Whitacre said on a conference call he’s stepping down as CEO on September 1 and will be replaced by director Dan Akerson. Whitacre will stay on as chairman, Akerson, Carlyle Group Inc managing director, said on the call.
“Ed and I share a common vision,” he said today. Whitacre joined the Detroit-based auto maker in July 2009, the month it emerged from bankruptcy, and he replaced Fritz Henderson as CEO in December.
GM, 61 per cent owned by the US government, reported second-quarter net income of $1.54 billion on increased vehicle sales and production as the auto maker prepares for an initial public offering.
Profit rose 44 per cent from $1.07 billion in the first three months of the year. Revenue increased 44 per cent from a year ago to $33.2 billion on growing sales of the Buick Excelle in China and Chevrolet Equinox in the US, the company said today in a statement. Operations in Europe will continue to improve, the company said.
General Motors Co is seeking to raise $12 billion to $16 billion in an initial public offering, said a person familiar with the plan.
The more than 500-page document, called an S-1, is likely to be filed tomorrow, though it may not happen until Monday, said the person, who asked not to be named because the discussions are private. The exact value of the offering may not be fully detailed in the registration statement filed with the US Securities and Exchange Commission, said the person.
The IPO would be the second-largest in US history, behind Visa Inc’s $19.7 billion initial offering in March 2008. The share sale is also the first step in freeing the Detroit-based auto maker from government ownership, which Chief Executive Officer Ed Whitacre has pushed for after GM’s $50 billion taxpayer bailout in the wake of its bankruptcy in June 2009.
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“After the restructuring, I expect GM to once again be a leading company on the US stock market,” said Kim Yong Tae, who helps manage $2.9 billion equivalent of assets at Yurie Asset Management Co in Seoul. “The US government has shown a strong will to revive GM. It’s a stock I want to add to my portfolio.”
Credit line
GM has secured a $5 billion revolving line of credit from a group of at least 15 banks as of last night New York time, said the person. More than half are named in the draft of the document as underwriters, including Morgan Stanley, JPMorgan Chase & Co, Citigroup Inc, Bank of America Corp and Credit Suisse Group AG.
Selim Bingol, a GM spokesman, declined to comment on details of the IPO.
“We will do an IPO when conditions are right for the company and in the markets,” he said in an e-mail.
Most of the shares offered would come from the US Treasury, the person said. The aim is to sell a fifth of the government’s 304 million shares, two people familiar with the plan said in June. That would reduce the Treasury’s holdings to less than 50 per cent.
The auto maker may sell a small number of new shares, the person familiar with the plans said yesterday. The Canadian government, the United Auto Workers union’s retiree medical trust and the estate of the bankrupt predecessor General Motors Corp haven’t decided whether to participate in the IPO, the person said.
The document will describe the old GM, its restructuring in bankruptcy and liabilities facing the new company, the person said.
‘Very careful’
“GM needs to be very careful about when to conduct the IPO,” said Yuuki Sakurai, chief executive officer of Fukoku Capital Management in Tokyo. “Can they convince investors to buy shares when spending is dropping in the US and they don’t have leading-edge environmental technology?”
The largest US auto maker will introduce its Chevrolet Volt electric-drive car later this year. The vehicle will compete with models including Nissan’s Leaf electric car and a planned plug-in version of Toyota’s Prius hybrid.
General Motors Corp filed for Chapter 11 bankruptcy protection on June 1, 2009, after posting $88 billion of losses since 2004, the last year the company reported an annual profit. General Motors Co emerged 39 days later.