Source: GM to File for IPO Mid-August

General Motors Co plans to file its initial public offering in mid-August, sources familiar with the situation told Reuters.

General Motors is also in talks with banks for a revolving credit line worth $5 billion, sources said. Bank of America Corp , Citigroup Inc , JPMorgan Chase & Co and Morgan Stanley have already agreed to provide $500 million of credit each, with other banks still to be chosen, a source said.

The credit line is expected to be finalized in the next two weeks, about a month before the automaker files for its IPO, a source said. Earlier media reports said the IPO filing was expected in early July.

GM spokeswoman Noreen Pratscher declined to comment.

GM is more likely to cut the valuation on the IPO than delay it, said one source, who requested anonymity because the talks are confidential.

The U.S. Treasury, which owns nearly 61 percent of the automaker's common shares after a $50 billion bailout, plans to sell $10 billion to $12 billion in shares, sources said.

But a Treasury official said: "It is way too early to know. The pricing and ultimate size of Treasury's stake are decisions for later in the year."

GM, which declared bankruptcy last year, has emerged from Chapter 11 protection, and an IPO is a key step for the automaker to wean itself away from government support.

GM is not expected to sell shares immediately, but plans to sell about $3 billion in mandatory convertible notes that convert into shares in the future, a source said. Proceeds from the IPO are expected to be used to repay debt and fund GM's pension liability, the source said.