General Motors Co. said Thursday it will move to lower its debt ahead of an initial public offering of shares expected in November.
The Detroit-based automaker announced it will cut debt and pension obligations by $11 billion US.
GM aims to use $11 billion US to pay down debt and add to its pension fund. (Jeff Kowalsky/Reuters) It aims to pay back U.S. taxpayers, company retirees and a health care trust using mainly its stockpile of cash, worth about $24 billion.
The company said it will pay $2.1 billion to U.S. taxpayers, $2.8 billion to a United Auto Workers health care trust and $6 billion in stock and cash toward its pension plans, which are underfunded by roughly $27 billion.
GM received billions in aid from the U.S., Canadian and Ontario governments after filing for bankruptcy protection in 2009.
Ottawa and Ontario hold their interest as GM shares, received in return for $9.5 billion in aid, and haven't said whether they will sell any of their 12.5 per cent stake in the IPO.
The UAW workers also own a large piece of the company.
GM will repay some of its debt to the U.S. government by buying 84 million preferred shares held by the Treasury Department.
That brings the total GM has repaid to $9.5 billion out of the nearly $50 billion the U.S. government gave the company to survive bankruptcy protection last year.
The American government's remaining $40 billion investment in the company is equivalent to 61 per cent of GM common shares. The Obama administration hopes to begin recouping that investment by selling some of those shares in the IPO.
With files from The Associated PressThis entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php
Five Filters featured article: Beyond Hiroshima - The Non-Reporting of Falluja's Cancer Catastrophe.
No comments:
Post a Comment