Monday, November 16, 2009
GM to start loan repayments early
The US carmaker General Motors (GM) has said it will start paying back its government loans earlier than expected.
It will make its first payment of $1.2bn (£717m) to the US government in December. GM had not been required to begin repaying the loan until 2015.
The news came as it reported a loss of $1.2bn from 10 July, when it emerged from bankruptcy, to 30 September.
GM chief Fritz Henderson said the firm still had work to do but the results were evidence of a "solid foundation".
He pointed out that GM had a healthier balance sheet with lower debt levels.
GM owes the US government $6.7bn and the Canadian government $1.4bn. Canada will also receive its first payment in December.
In addition, Germany will be repaid the outstanding 400m euros (£358m) that it lent in support of GM's European business Opel.
GM changed its mind over the sale of Opel earlier this month. It had been planning to sell it to a group led by the Canadian car parts maker Magna, but decided instead to retain ownership.
'Modest growth'
Sales in the US were boosted by the government-sponsored "cash for clunkers" incentive scheme.
GM said the market in China was proving to be a particularly strong contributor to its results. It is predicting "modest growth" in the global car industry in 2010.
In a conference call, Mr Henderson said GM, which is 61%-owned by the US tax payer, was preparing for a share offering in the second half of next year.
DATED: 16.11.09
FEED: AW
