GM says up to 5 percent of IPO for employees, dealers

DETROIT/WASHINGTON (BestGrowthStock) – General Motors Co (GM.UL: ) will allocate up to 5 percent of the common stock to be sold in its initial public offering for its employees, retirees and dealers, the automaker said on Thursday.

The disclosure by GM in a filing with the U.S. Securities and Exchange Commission represents the first information on how the shares will be sold in the automaker’s IPO expected next month.

Morgan Stanley Smith Barney is administering a directed stock purchase program that GM has opened to about 600,000 workers, retirees and dealers.

GM told its employees this week that they would have until October 22 to register to buy shares in the IPO at a minimum commitment of more than $1,000 per investor. The maximum has not been determined yet, the company said then.

GM was restructured in a 2009 bankruptcy with $50 billion in U.S. government funding. The IPO planned for November is the first step in reducing the U.S. Treasury’s nearly 61-percent stake in the top U.S. automaker.

Separately, the U.S. Labor Department said it has given its approval to a plan conceived as part of bankruptcy for funding a trust fund affiliated with the United Auto Workers union that is paying for retiree health care.

That approval was another hurdle to clear for GM to move forward with its IPO since the UAW’s trust fund is another major shareholder along with the U.S. government and the governments of Canada and Ontario.

A decision published Wednesday in the Federal Register will permit the UAW’s Voluntary Employee Beneficiary Association to hold GM common stock worth 17.5 percent and warrants allowing the trust to acquire another 2.5 percent.

The UAW’s VEBA will hold $6.5 billion in preferred stock and a note for $2.5 billion.

As of GM’s bankruptcy, about 751,700 former hourly workers and their dependents in the United States received retiree health benefits from the automaker.

(Reporting by Kevin Krolicki in Detroit and John Crawley in Washington; Editing by Phil Berlowitz)

GM says up to 5 percent of IPO for employees, dealers