1. Project for MBA 511
General Motors Company
Initial Public Offering in Nov. 2010
Prepared by Mariya, Natalia, Omina and Rustam

2. GM Reorganisation
Old GM New GM
(before July 10, 2009) (after July 10, 2009)
Vauxhall, Pontiac,
Chevrolet, Cadillac, Vauxhall, Chevrolet, Cadillac,
GMDaewoo (48.2%), Brands GMDaewoo (70.1%), GMC,
GMC, Hummer, Holden, Holden, Buick, Opel
Buick, Opel, Saturn, Saab
5,900 US Dealerships 5000
NGMCO - the United States
Treasury (60%), the Canada
Common shareholders, Development Investment
bondholders and secured Ownership Corporation (12%), Government
creditors of Ontario, Old GM bondholders
(10%), and UAW and CAW
unions (17,5%)
47 US Plants 34
US$94.7 B Debt[1] US$17 B
91,000 US employees 68,500

3. New GM performance
 Debt reduction
– from $172.8 bln (June 1, 2009 bankruptcy
declaration) to $8.6 bln as of Sept. 30, 2010
 As a result of restructuring GM:
– discontinued unprofitable operations (sold off
Saab, phased out Hummer, Pontiac, Saturn)
– Honed product line and cut costs
– Brought new management team on board
 Focused on profitable brands Chevrolet,
Buick, GMC and Cadillac

4. Financial results in 2010
 Vehicles sales growth in Nov. 2010 –
11.4% (on a year-to-year basis)
 Revenues growth by 2.5%-5% per
quarter
 Net income (appl. to c/s) for 9 months
of 2010– $4.2 billion
 Earnings per share – $2.62

5. Initial Public Offering –
11/18/2010
 Ordinary (voting) shares:
– 478 mln x 33 US$ p/s = 15.77 bln US$
 Convertible junior preferred shares:
– 87 mln x 50 US$ p/s = 4.35 bln US$
 Total volume – around 23.1 bln US$:
– the largest IPO of all time
 Reduction of Government stake in GM from
61% to 33%

6. GM Common shares sales

7. Future growth potential
of new GM
 North American market (leader –
19% market share)
– Projected growth of sales by 7.0% over
2010-2014
 Growth in auto industry sales in the
US:
– 10,4 mln vehicles in 2009
– 11,4 mln in 2010 (projected by S&P)
– 12,9 mln in 2011 (projected by S&P)

8. Future growth potential
of new GM (cont.)
 Growth in auto industry sales in BRIC
countries (Brazil, Russia, India and China;
leader – 13% market share):
– Projected growth of sales by 13.9% over
2010-2014
 New tech cars:
– Chevrolet Volt recognized:
 2011 Car of the Year by Motor Trend, Automobile
magazines
 2011 Green Car of the Year by Green Car Journal

9. New-tech cars –
Chevy Volt

10. China – new battlefield
for automakers
 The world's biggest and fastest-growing
auto market
 GM has 10 joint ventures and 2 wholly
owned foreign enterprises
 GM – top-selling foreign brand in China
– 1,8 mln vehicles sold in 2009 making up 13,4%
of Chinese market share
– In 2010, for the first time, GM is selling more
vehicles in China than in the U.S.

11. China – new battlefield
for automakers

12. Will GM sustain its
positive momentum?
 Cyclical nature of the auto industry
 Government ownership (33%)
 Outstanding pension fund debt (17.1
bln in 2009)
 Chapter 11 debt (more than 26 bln)
 Losses in European operations
 Focus on operating profit vs. market
share

13. Our prediction for the end
of 2010
 Common shares - $33-36
 Revenues growth by 2.5-3 p/a
 Net income (appl. to c/s) – $5.5 bln
 Earnings per share – $2.50-$2.80

14. Thank you
for your attention