|
| GM generates $3.3 billion, will repay loans |
| Bloomberg / Detroit Nov 17, 2009, 00:09 IST |
|
General Motors Co, signalling confidence in its recovery from bankruptcy, said it generated $3.3 billion in cash in the third quarter and plans to start repaying government loans early.
Cash on hand was $42.6 billion at the end of September after a restructuring engineered by the Obama administration, and GM reported progress in cutting jobs and shutting dealers. The loss since leaving Chapter 11 on July 10 was $1.15 billion, GM said.
The results offered the first glimpse of Detroit-based GM’s financial performance since shedding the remnants of the old General Motors Corp on July 10 under Chairman Ed Whitacre and Chief Executive Officer Fritz Henderson.
“The numbers are encouraging,” Maryann Keller, president of consultant Maryann Keller & Associates said. “What it demonstrates is that the government gave GM a reorganised balance sheet that made them more competitive.”
GM’s 8.375 per cent bonds maturing in 2033, which will convert into equity in the new company, jumped 2.63 cents to 20.3 cents on the dollar at 9:14 am in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. A closing price at that level would be the highest since January.
Headwinds this quarter will include a cash drain as the loan repayments begin and from a US auto market that will be 8.5 per cent smaller than in the previous three months, GM said. The US government is owed $6.7 billion and also owns a 61 per cent stake in the biggest domestic automaker, which said it still expects an initial public offering in 2010’s second half.
Third-quarter revenue was $28 billion, including $26.4 billion for the post-bankruptcy period. GM reported unaudited data for July 1 through July 9 for General Motors Corp, and for the period since July 10.
“We are ahead of the bankruptcy plan, not only in operations, but with some contingencies we provided for that we have been able to manage,” Henderson, 50, said.
GM’s results don’t compare directly with year-earlier data because of the bankruptcy. The pre-Chapter 11 GM lost $2.54 billion in 2008’s third quarter, its best three-month period last year.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
Content Guide
