Reuters | Morgan Stanley and JPMorgan Chase & Co are likely to be
the lead underwriters in a General Motors initial public offering, The
Wall Street Journal reported on Friday, a role that may bring the banks
glory, but not much in fees.

The underwriting banks are expected to get less than 1 percent of the
deal in fees, the Journal reported, citing an unnamed source. A typical
fee for an IPO is 7 percent, but in recent years some larger deals have
carried lower fees.

The U.S. Treasury Department owns nearly 61 percent of the automaker’s common shares after providing $50 billion in bankruptcy and bailout financing. In addition to the nearly $7 billion in direct loans to GM, the Treasury extended $43 billion in bailout cash.

GM repaid a $6.7 billion loan in April. The rest of the U.S. investment is an equity stake that the government can start selling off after GM launches an IPO.

The timing of an offering is uncertain, but the Obama administration said on Thursday it would not happen before the fourth quarter. Chief Executive Ed Whitacre has said that an IPO is a possibility later this year or in 2011.

GM is taking charge of the preparation for a stock sale, but the government would retain the right to decide whether to participate and at what level.

The Treasury hired Lazard Ltd last month as an adviser on an IPO.

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

Morgan Stanley and GM spokesman Tom Wilkinson declined to comment. JPMorgan and the Treasury were not immediately available for comment.