By Soyoung Kim and Clare Baldwin
NEW YORK (Reuters) - General Motors Co has
added Bank of America Merrill Lynch and Citigroup Inc
to the slate of its lead underwriters for its initial
public offering, two sources familiar with the situation said
Initial paperwork for the IPO is now expected to be filed
with the U.S. Securities and Exchange Commission early next
week, several sources familiar with the situation said.
The filing was originally expected Friday but was
delayed because the company had to update its prospectus with
the recent CEO change and a management risk factor, another
source familiar with the situation said Friday.
Bank of America Merrill Lynch and Citi will join JPMorgan
Chase & Co and Morgan Stanley as lead
underwriters, the first two sources said.
JPMorgan and Morgan Stanley, picked as lead underwriters on
the GM IPO earlier this year, helped the automaker prepare the
paperwork for the IPO; Bank of America and Citi led the $5
billion credit facility that GM recently completed in
preparation for its IPO, the sources said.
All the sources declined to be named because preparations
for the IPO are not public.
Graphic on GM IPO http://link.reuters.com/vex84n
Reuters Insider http://link.reuters.com/ven54n
Reuters Breakingviews [ID:nN1287955]
TIMELINE-GM:The year from bankruptcy to IPO[ID:nN13212912]
Ten major banks have signed on to the credit facility,
committing up to $500 million each, but the individual
commitments would be cut as GM adds more banks in other
countries and emerging markets as part of its efforts to
attract global investors, several of the sources said.
Banks participating in the credit facility are Bank of
America, Citi, Barclays Capital, Deutsche Bank
, Goldman Sachs Group, JPMorgan Chase, Morgan
Stanley, Royal Bank of Canada, UBS and Credit Suisse
, the sources said.
Bank of America and Morgan Stanley declined to comment; GM,
Barclays, Citi, Deutsche Bank, Goldman Sachs, and JPMorgan,
Royal Bank of Canada, UBS and Credit Suisse were not
immediately available for comment.
GM's initial prospectus to be filed next week will likely
list about 10 banks as underwriters, with more banks added
before the IPO prices, one of the sources said. The banks that
will be listed as underwriters in the initial filing are likely
to be the same banks that have committed to the credit
facility, the source added.
GM's several-hundred-page prospectus will not provide the
number of shares to be sold or the pricing range. It will cite
the company's bankruptcy, steps completed in restructuring,
financial projections, details of ownership, and a large set of
risk factors, sources have said.
RISKY MANAGEMENT, RETAIL INVESTORS
GM is now adding a new risk factor regarding the departure
of Whitacre and increased uncertainty about the automaker's
long-term leadership, one of the sources said.
GM Chief Executive Ed Whitacre said Thursday he would
step down and Dan Akerson would take over, effective in
A successful GM IPO, which could be the largest ever for
the U.S. market, would hand the Obama administration an
important political win against critics of its controversial
$50 billion bailout of the top U.S. automaker, analysts have
The U.S. Treasury has a 61 percent stake in GM as a result
of the bailout.
As GM gets closer to selling shares to the public, it must
decide what percent of the IPO to sell to institutional
investors and what percent to sell to retail investors. It is
currently considering selling 20 percent to 30 percent of the
IPO to retail investors -- more than the 20 percent typically
sold to retail, one of the sources said.
By filing initial paperwork with the SEC next week, GM is
aiming to complete its IPO between late October and the U.S.
Thanksgiving holiday, another source familiar with the matter
The automaker secured the $5 billion credit facility this
week, two sources briefed on the deal told Reuters
Wednesday, clearing a key hurdle toward the initial public
offering of stock expected to make the U.S. government a
(Reporting by Soyoung Kim and Clare Baldwin; editing by Lisa
Von Ahn, John Wallace editing by Andre Grenon)