General Electric’s (GE) private-label credit card unit Synchrony Financial has launched initial public offering (IPO) with aim to raise as much as $3.3bn.
Synchrony plans to sell 125m shares, or 15.1% of outstanding, at US$23-$26 a share, according to ifre.com.
The IPO sets in motion GE’s biggest move to slim down its GE Capital business.
The IPO values the division at $21.6bn versus 2013 net interest income of $10.4bn and net earnings of $1.8bn.
After the IPO, GE will own 85% of Synchrony and distribute the remaining shares to its stockholders in a tax-free transaction.
Thes proceeds from the IPO will be used to repay its debt, increase its capital and to increase the size of its liquid portfolio, GE said.
Goldman Sachs & Co., J.P. Morgan, Citigroup, Morgan Stanley, Barclays, BofA Merrill Lynch, Credit Suisse and Deutsche Bank Securities are managing the IPO.
In March 2014, GE had filed a registration statement for IPO of its retail finance business, as part of a planned stage exit from that business.
Synchrony Financial handles store credit cards for major retailers like Gap, Walmart and JC Penney.