Kathryn Elizabeth Tuggle
FOXBusiness A newly-formed General Motors entity could make an initial public offering in 2010 according to testimony from auto task force member Harry Wilson in U.S. bankruptcy court on Wednesday.
GM is currently seeking approval to sell its assets to a “new GM” that is currently backed by the government. If the deal wins approval, GM will be allowed to sell its strongest assets including its Cadillac and Chevy brands.
During Wilson’s testimony, he confirmed that the only way to save GM is through an asset sale to the “New GM.” But there is one catch to the sale: it must close by July 10, when the government--imposed deadline runs out and Uncle Sam $30 billion in financing to help the beleaguered auto maker.
"We cannot make an open-ended commitment," Wilson said in court of the looming deadline. "At one point, it's better to cut one's losses… We have no intention to further fund this company if the sale order is not entered by July 10.”
GM filed for Chapter 11 bankruptcy four weeks ago and is in its third day of hearings under Judge Robert Gerber to approve the asset sale. On Tuesday, the court ruled that CEO Fritz Henderson will remain head of the new GM.
During his testimony, Wilson said that GM has received around $10 billion in funding since it filed for bankruptcy. The U.S. Treasury would offer an additional $60 billion in financing to the “New GM,” which would give the government a 60% stake in the new company. Additionally, the United Auto Workers Union hold 17.5%, Canada would own 12%, and GM bondholders would own 10%.
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