WASHINGTON (AP) — General Motors Co., not the government, will determine when the automaker will conduct a public stock offering at the heart of the company's revival, the Obama administration said Thursday.
The Treasury Department said in a statement that it expects to sell some of its 61 percent stake in GM when the automaker goes public. The initial public offering could happen as early as October.
Treasury provided guidance on how it intends to be involved in GM's much-anticipated stock sale, which is expected to be among the largest initial public offerings in U.S. history. The stock offering is a key part of GM's recovery as it emerges from a government-led bankruptcy last year.
"GM must determine that it is, in all relevant respects, ready to become a public company. For those reasons, it is critical that the process of preparing for a potential IPO be managed by GM," the department said.
Treasury said GM will choose the banks that underwrite the deal, "subject to Treasury's agreement that the selection is reasonable," but the department will determine the fees to be paid to the banks. Major Wall Street banks are trying to become the lead underwriter of the stock sale but the government is expected to push for low fees related to the stock sale.
In a statement, GM said, "We will launch an IPO when the conditions are right and GM is ready."
The department said the IPO is expected to include the sale of shares by Treasury, GM and other shareholders. The size of the offering and the amounts of primary and secondary shares will be determined later.
The Obama administration has long stressed it is not involved in GM's daily business decisions. But administration officials have said they need to protect taxpayers and recoup as much as possible of the $50 billion in federal aid provided to GM.
GM has said it may sell shares in late 2010 or early 2011. But CEO Ed Whitacre and company officials have said the timing will be determined by the state of the financial markets, the overall health of the auto industry and GM's ability to make progress.
GM has repaid $6.7 billion that the government considered loans. The remaining $43.3 billion was converted to the 61 percent ownership stake. GM announced a profitable first quarter of 2010, as its net income rose to $865 million compared to the $6 billion it lost in the same period last year.
To pay off its shareholders, including the government, a United Auto Workers union health care trust and its old bondholders, the stock market would have to value GM at more than $70 billion. That would be nearly double Ford Motor Co.'s market value of more than $38 billion, but far less than the total value of Toyota's shares of more than $110 billion.
Separately, two top Republicans on the House Oversight Committee asked GM to stop destroying electronic documents, saying the practice hinders committee probes into possible political influence of the automaker.
In a letter to Whitacre, Reps. Darrell Issa, R-Calif., and Jim Jordan, R-Ohio, wrote that they are "deeply disturbed" that GM may be purging documents that could be relevant to several congressional investigations of the company.
The lawmakers said a senior GM attorney told the committee the automaker purges all electronic documents after 60 days and does not retain any copies. The committee has requested e-mails, notes, letters and other records dating back to Nov. 1, 2008.
The committee's investigations include whether interference by lawmakers influenced some corporate decisions, such as what GM plants should be closed and remain open as the company reorganized during bankruptcy last year.
The letter said there was no evidence of GM willfully destroying documents, but warned that any further action would be criminal misconduct.
GM spokesman Greg Martin said the company's document policies comply with the law.
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AP Business Writer Stephen Manning contributed to this report.
