GM increases price of IPO shares by 18 percent; proceeds could top $18 billion

General Motors Co. announced today that it has increased the price of shares in its initial public offering scheduled for Thursday by 18 percent.

The company will sell its common stock for $32 to $33 per share. Previously, it had announced the stock would sell for $26 to $29.

The increase is good news for taxpayers, who likely will see greater returns on their GM investment, made through the Troubled Asset Relief Program.

The Special Inspector General for TARP has previously estimated that GM's stock would need to sell for $133.78 a share for Treasury to break even on its investment.

That comes to $45.59 a share after a recent three-for-one stock split -- still about 29 percent higher than the mid-point of the new price structure.

GM also is increasing the amount of preferred stock it will sell in the offering by a third, to 80 million shares. The move is expected to lift its proceeds from that share sale to $4 billion.

The U.S. government curently owns 61 percent of GM. The company will sell 365 million shares as part of the IPO, and of those, 263.5 million are owned by Treasury.

Under the new pricing structure, Treasury can expect to earn at least $8.4 billion, compared to $6.9 billion under the old plan.

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