A restructured General Motors Corp will get the remaining $20 billion in government bankruptcy financing over the rest of this year and could be ready to launch an initial public stock offering in early 2010, a senior U.S. official said on Monday.

Steven Rattner, who heads the Obama administration's autos task force, said he was confident that a U.S. bankruptcy judge's decision on Sunday to allow the sale of the automaker's best assets to a New GM would withstand appeals.

The decision will clear the path for the company to emerge from bankruptcy court in coming weeks and will allow the U.S. Treasury Department to focus on divesting its stake, Rattner told reporters on a conference call. The bankruptcy judge issued a four-day stay of the sale order, allowing for possible appeals.

Rattner expects GM to name additional board directors later this month.

A former investment banker, Rattner said an IPO for a portion of the government's stake that would return GM to public ownership would need a decently robust stock market to succeed.

I believe that will be some time next year, he said. I would like to think and hope that would be in the first half of next year but I would not want to predict anything specific.

The administration was not trying to get the last dollar for the taxpayer's investment of some $60 billion and would not wait for a stock market boom that never materializes, he said.

The government was committed to selling its stake as quickly as possible, but Rattner added, when you're a 60 percent shareholder, you can't sell it all in one day.

The government will receive a stake of that size in the new GM for the $60 billion in financing to support GM's turnaround, half of which is bankruptcy financing. About $50 billion of the U.S. government's money will be converted into stock in the reorganized company, which will still be named General Motors.

CASH FLOW CUSHION

GM has so far received about $10 to 11 billion of the bankruptcy financing and will get the rest of the money by year-end, though there was no set timetable for payments, Rattner said.

We want them to be able to spend the whole day without looking at the bank balance and wondering if their check is going to clear, he said. We want to get them ... to focus on selling cars and making money.

Rattner reiterated his view that the restructured GM and Chrysler LLC would be able to break even in a tough economic environment that holds U.S. industry car and light truck sales to 10 to 11 million units a year.

And he does not anticipate that Ford Motor Co, with ample cash resources on its own, would need government help in the future.

June auto sales showed signs of the market bottoming out, and there was room for a modest recovery in coming months for U.S. industry sales to return to the historic scrappage rate of about 12.5 million units annually, he said.

The new GM will have to fight hard to reverse market share losses, and Rattner said he anticipated that GM Chief Executive Fritz Henderson and Chairman Edward Whitacre would change the automaker's management structure to be a bit closer to the ground, a bit leaner and meaner.

In the meantime, the government will monitor GM's progress in the same way as another institutional investor with a large stake in a company would -- looking after taxpayers' investment without meddling, he said. It will, however exercise voting powers to approve board members, but not other company decisions.

We are not going to operate as a parallel board. We are not going to micromanage or get involved in day to day decisions. I've said many times, we're not picking colors of cars or things like that, Rattner said.

(Additional reporting by Kevin Krolicki; editing by Leslie Gevirtz and Tim Dobbyn)

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