GM makes remarkable return to stock markets
GM's shares climbed as high as 9.1 per cent in New York on their first day of trading.
More than 90 per cent of the shares offered by General Motors have already been picked up by US and Canadian mutual and pension funds and retail investors, thus making it a remarkable return for the car maker to the stock markets in New York and Toronto yesterday.
On their first day of trading, GM's shares climbed as high as 9.1 per cent in New York, but closed at $34.19, up 3.6 per cent.
On the Toronto exchanges, the shares shot higher in early trading and almost hit $36 before falling back to $34.01 at the close of action.
The highest allocation offered by the IPO - nearly $ 4bn -- was scooped up by retail investors while demand from GM employees and retirees, who were allocated five per cent, was also strong.
GM is poised to raise between $15.8bn and $23bn for key shareholders, including the federal Ontario and US governments, which will still control the automaker.
However, the US and Canadian governments will reduce their holdings from 72.4 per cent to about 46.3 per cent and reap at least $15.6bn from the offering, while the United Auto Workers' retiree health-care trust, which holds almost 20 per cent of GM, will reduce its stake to less than 14 per cent.
The almost $50bn bail-out in June 2009 sparked controversy, but enabled the company to shed its colossal debt and restructure its operations by killing off several ailing brands and stripping out excess production capacity.