SAIC, Chinese automaker, may invest in GM

No comments were made by both the companies, but the newspaper website has cited undisclosed sources as saying that the final decision could be made public within a few days by SAIC.

The U.S. government, which now holds 61 percent stake in GM, plans to bring down its share in the company to near 40 percent.

Investment from autonomous funds is considered good as these funds hold stocks for a longer period, which provides stability to the company.

Foreign investment good
Foreign investment in American companies, including automakers, is common but the GM IPO is a sensitive issue for Obama administration, especially if some big investors from U.S. fail to turn up.

U.S. government has invested $50 billion of the tax payers’ money to save the company after it was declared bankrupt.

The final price of the stocks is planned to be declared on Wednesday. It is expected to be between $26 and $29, and the actual sale will take place Thursday.

GM is also selling 60 million preference shares at a price of $50 each. These shares will give a dividend of 5.5 to 6 percent per annum.

Both companies already in collaboration
GM and SAIC opened their first joint venture factory in 1998 in Shanghai. Both companies also have plans to sell vehicles in India jointly for which SAIC has committed $350 million and will have 51 percent share in the company.

GM may sell its shares above the expected price and may also increase the size of the IPO amid signs of heavy demand.

The GM stock offering is already oversubscribed many times but the banks are continuing with the sale to dispel the notion of selective sale or the avoidance of any potential buyer.

Big overseas investors are also placing orders at the rate of $30 per share and are likely to hold the shares for a long time. About 15 to 20 percent shares of the offering are to be allotted to individual investors.

Joe Phillippi, from Auto Trends Inc., New Jersey, said that it is good for the tax payers that IPO was being sold to institutional investors because in this way GM will find keen buyers without resorting to aggressive marketing targeted at individuals.