GM says could use IPO to pay back U.S. gov't debt

By Kevin Krolicki

DETROIT (Reuters) - General Motors could use the proceeds of an initial public offering of stock as soon as 2010 to begin paying down some of the debt it owes to the governments of the United States and Canada, a senior executive said on Friday.

GM Chief Financial Officer Ray Young also said the automaker could move faster towards generating positive cash flow and achieving profitability than planned if U.S. auto sales recover in 2010.

"Naturally we would love to go faster and I'm sure the new GM board will push us to see whether we can accelerate these plans and actions," Young told Reuters Television in an interview.

"We're forecasting some modest recovery in 2010 in the United States but at this juncture it's hard to predict what will happen in 2010," he said.

GM, which emerged from bankruptcy on Friday, is now more than 60 percent owned by the U.S. Treasury. The governments of Canada and Ontario hold 11.7 percent. In addition, the new GM owes $8 billion (5 billion pounds) to the U.S. and Canadian governments under loans that mature in 2015.

Young said GM could use an initial public offering of its shares, which could happen as early as 2010, to pay back debt.

"To the extent that we do an IPO, whereby, let's say the government sells some of their shares but we also issue some new shares, those proceeds could be used to repay part of the US Treasury and Canadian government loans," Young said.

As part of the deal to create the new GM by selling its best assets out of bankruptcy, the U.S. Treasury transferred the remaining $20 billion in government emergency financing to an escrow account for GM.