GM IPO won't happen before Q4 2010 - U.S. Treasury

A worker walks behind a logo of General Motors in Antwerp January 21, 2010. A General Motors Co initial public offering will not take place before the fourth quarter of 2010, and the timing will be decided by GM based on market conditions, the U.S. Treasury said.

WASHINGTON (Reuters) - A General Motors Co initial public offering will not take place before the fourth quarter of 2010, and the timing will be decided by GM based on market conditions, the U.S. Treasury said on Thursday.

The Treasury, which owns nearly 61 percent of the U.S. automaker's shares, said GM is taking charge of the preparation process.

But the Treasury, in guidance issued on its role in an offering, said it will retain the right to decide whether to participate and at what level.

"The initial public offering is expected to include the sale of shares by Treasury, other shareholders who wish to participate and GM," The Treasury said.

Treasury said the offering's overall size and split between primary and secondary shares would be determined at a later date.

The Treasury last month hired Lazard Ltd as its adviser in a GM offering that would return the company to public ownership after emerging from a government-sponsored bankruptcy last year.

The government provided $50 billion in bankruptcy and bailout financing for GM.

Lazard will earn $500,000 per month until an IPO is completed under its 18-month contract with Treasury.

In addition to the Treasury, the United Auto Workers health care retiree plan and the Canadian government hold significant stakes in GM equity.

As part of its preparation process, GM will prepare a registration statement, a prospectus and other documents, work with the Securities and Exchange Commission, and meet with potential investors.

"GM must determine that it is, in all relevant aspects, ready to become a public company. For those reasons, it is critical that the process of preparing for a potential IPO be managed by GM," the Treasury said.

GM said in a statement that there was a "a lot of anticipation and speculation" relative to an IPO.

"As we have previously said, there are a number of factors that will influence the timing, including the state of the economy, capital market conditions, state of the auto business, GM's performance and others," GM said.

GM executives have said an IPO was a real possibility later this year or in 2011.

(Additional reporting by Soyoung Kim in Detroit; Editing by Leslie Adler)