The U.S. Internal Revenue Service granted tax-free status to General Motors' planned spinoff of its Delphi Automotive Systems, Bloomberg News Service reported.
GM plans to sell 17.7 percent of Delphi's stock in an initial public offering before the end of March, GM said last month. The IRS ruling clears the way for a distribution of the remaining 82.3 percent to GM shareholders.
Delphi, based in Troy, Mich., is the world's largest supplier of auto parts with 1997 revenue of $31.4 bil-lion. The parts maker seeks to sell 100 million common shares through the offering, according to documents filed with the Securities and Exchange Commission. That would leave Delphi with 465 million shares outstanding.
The underwriting group for the initial public offering, led by Morgan Stanley Dean Witter & Co., plans to market each share at $14 to $18, the filing said. That would imply that Delphi's initial market value is as high as $10.2 billion.