NEW YORK - General Motors executives have begun criss-crossing the US and the world on an investor roadshow ahead of the company's US$40 billion ($50 billion) flotation, and they are being allowed to use private jets for the first time in two years.
Their mode of travel was attracting almost
as much attention as the financial details of the offering yesterday, two years after car industry bosses caused a political furore by flying private aircraft to Washington to beg for bail-out funds.
Since then, GM has received US$49.5 billion from the US taxpayer.
The Government's 60 per cent stake will be cut to 43 per cent in the flotation, which will raise US$9.5-U$15.7 billion.
About a quarter of GM's shares will be traded on the New York Stock Exchange, putting market capitalisation at just over US$40 billion at the mid-point of the price range.
In that range - US$26 to US$29 per share - the US Treasury will be locking in a loss on GM,whose shares would have to jump 60 per cent for taxpayers to break even.
Before the issue, GM executives will be meeting potential investors. The company was ordered to sell its private jet fleet as a condition of the bail-out, but will charter private jets so executives can attend meetings.
At a 2008 Congressional hearing, the bosses of GM, Ford and Chrysler were asked to raise their hand if they travelled to the meeting on commercial flights. None did. The next time they travelled to Capitol Hill to ask for a bail-out, they all drove.
- INDEPENDENT
