Foreign wealth puts GM on shopping lists

BEIJING, Nov. 13 (UPI) -- Foreign investors plan to increase their stake in U.S. automaker General Motors Co. with its initial public offering, a source told The Wall Street Journal.

Chinese government-owned automaker SAIC Motor Corp. is discussing a deal to purchase about 1 percent of the U.S. company, for about $500 million, the newspaper said. Combined with other deals in the pipeline, foreign wealth funds, the investment firms representing governments, are expected to purchase about 16 percent of the GM shares offered in its IPO next week.

GM and SAIC are already partners in India and China, where GM is the leading largest foreign automaker in the world's fastest growing auto market.

GM is seeking to raise $10 billion in its stock offering.

The U.S. government, which loaned GM $50 billion to pull it through last summer's bankruptcy, is expected to use the IPO to sell about $7 billion of its company holdings, which would decrease its share of the company from 61 percent to 35 percent.

The automaker reported a $2 billion third quarter profit. Executives have spent considerable time recently pitching its IPO, expecting a share price of around $29. That could rise, however, if demand is high, the Journal said.