Report: U.S. hires lead bank for General Motors IPO
While both General Motors and the Treasury would obviously both like the latter to unload the majority stake it owns in the automaker as soon as possible, that process needs to be done carefully. Political and public perception considerations point to an early IPO, but that may not be the smartest thing to do from a business perspective. Selling before its clear that GM's recovery is well underway could lead to getting too low a share price. The bank will reportedly also look at other options for disposing of the 61 percent shareholding.
According to the report, Lazard Frères & Co. will get paid $500,000 a month for the first year and $250,000 per month after that if the sale hasn't yet been completed. Estimates from various sources are that the treasury will face losses of $25-30 billion on the bailouts of GM, Chrysler and GMAC.
[Source: The Detroit News | Image: Stan Honda/Getty]
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