GM boosts share offer to raise up to $18bn

image captionGM's share offer will reduce the US government's 60% stake in the company

The US car giant General Motors (GM) says its offer of shares to the public could raise $18bn (£11.3bn), $5bn more than first hoped.

Investor interest in the sale means demand has rocketed and increased the price the company can charge.

The company is currently more than 60% owned by the US government which is keen to return it to the market.

It plans to sell 365 million common shares for up to 18% more than first estimated at a price of $33 each.

It will also now offer $4bn in preferred stock - four times the original value planned.

Preferred stock carries different rights and will help to pay off the company's pension debt - one of the concerns of potential investors in the share sale.

According to the Reuters news agency, a price for the common stock of $33 per share would give GM a market value of about $63bn - close to the $66bn value that GM needs in order for US taxpayers to break even, based on the US Treasury's remaining common stock holding and a share price projection by the Treasury's special inspector general.

The stock is expected to begin trading on the New York and Toronto stock exchanges on Thursday.

The company earlier this month published profit figures which showed a net profit of $2bn (£1.2bn) in the three months to 30 September, fuelled by a rise in sales both in the US and overseas.

The US government took control of GM in July last year as part of a rescue of the company that was forced into bankruptcy protection after sales plummeted during the global downturn.

The American taxpayer has pumped $50bn into the company to keep it from going under.

GM's fortunes have improved in part due to large-scale restructuring, including the closure of factories and a drastic reduction in the number of dealerships, which has helped to reduce costs.

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