Home
News
In Focus
Business
Metro
Nation
World
Sports
Feature
Opinion
View more »Opinion Columns
Wan LixinOpinion deputy editor of Shanghai Daily
Restaurants get off to a quick start thanks to game-changing policies
High service charges on event ticket refunds call for further regulation
Sunday
- Subscribe
Related News
GM borrows additional US$4 billion from government
Source: Agencies |
May 23, 2009, Saturday
|
Online Edition
Online Edition
GENERAL Motors Corp. said yesterday that it has borrowed an additional US$4 billion from the Treasury Department, meaning the automaker has now accepted US$19.4 billion in loans from the US government.
GM started taking government money in December and said it intended to borrow US$2.6 billion more by June 1 and an additional US$9 billion after that. But in a regulatory filing yesterday, GM said it needed US$1.4 billion sooner than originally forecast.
The company didn't publicly disclose how it will use the money but said it provided the information to Treasury officials, and they considered the loan acceptable.
"We appreciate President Obama's and his administration's ongoing support of GM and the domestic US auto industry as we undertake the difficult but necessary actions to reinvent our company," the company said in a written statement.
GM said it now expects to need US$7.6 billion in loans after June 1.
GM has until then to complete restructuring plans that satisfy the government's auto task force, or else it will be forced to file for bankruptcy protection. The automaker has been scrambling to cut labor costs, reduce its debt, shed dealerships and brands, and close excess factories.
The company this week reached cost-cutting deals with Canadian and US unions that still have to be ratified by members, but GM's unsecured bondholders have resisted an offer to take a 10 percent stake in the company to wipe out US$27 billion in debt. They say that's too small a stake for the amount they are owed.
Analysts have said it's highly unlikely GM will get 90 percent of its bondholders to agree to the offer, which is what the government is requiring.
In addition to the US$19.4 billion that GM has directly borrowed from the government, its financial arm, GMAC Financial Services, has received US$12.5 billion in aid, plus GM received a US$1 billion loan to buy more equity in GMAC.
The government is also setting aside money to cover GM's expected warranty costs as part of a program to assure car buyers that their warranties will be honored regardless of what happens to the automaker.
GM started taking government money in December and said it intended to borrow US$2.6 billion more by June 1 and an additional US$9 billion after that. But in a regulatory filing yesterday, GM said it needed US$1.4 billion sooner than originally forecast.
The company didn't publicly disclose how it will use the money but said it provided the information to Treasury officials, and they considered the loan acceptable.
"We appreciate President Obama's and his administration's ongoing support of GM and the domestic US auto industry as we undertake the difficult but necessary actions to reinvent our company," the company said in a written statement.
GM said it now expects to need US$7.6 billion in loans after June 1.
GM has until then to complete restructuring plans that satisfy the government's auto task force, or else it will be forced to file for bankruptcy protection. The automaker has been scrambling to cut labor costs, reduce its debt, shed dealerships and brands, and close excess factories.
The company this week reached cost-cutting deals with Canadian and US unions that still have to be ratified by members, but GM's unsecured bondholders have resisted an offer to take a 10 percent stake in the company to wipe out US$27 billion in debt. They say that's too small a stake for the amount they are owed.
Analysts have said it's highly unlikely GM will get 90 percent of its bondholders to agree to the offer, which is what the government is requiring.
In addition to the US$19.4 billion that GM has directly borrowed from the government, its financial arm, GMAC Financial Services, has received US$12.5 billion in aid, plus GM received a US$1 billion loan to buy more equity in GMAC.
The government is also setting aside money to cover GM's expected warranty costs as part of a program to assure car buyers that their warranties will be honored regardless of what happens to the automaker.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
