GM plans to start govt loan repayment later this yr: report
Press Trust of India / New York Nov 16, 2009, 15:10 IST
General Motors is planning to start the repayment of a $6.7 billion loan it received from the US government later this year, says a media report.
Attributing to a person familiar with the matter, The Wall Street Journal said, GM plans to begin paying back a $6.7 billion loan it owes to the US government starting late this year, which would put it on track to potentially repay the entire loan by the middle of 2011.
The report said the move could be controversial and risky as the car maker plans to use other money it received from the government to pay back the borrowing.
The daily said that GM's move, in which it would repay one billion dollar per quarter to the Treasury, is likely to be outlined today, when the company reports its earnings for the first time since emerging from bankruptcy.
In addition, the company would also start repaying a $1.4 billion loan to Canada at $200 million per quarter.
According to the publication, GM outperformed financial objectives during its 40-day stay in bankruptcy and in the months since it emerged from Chapter 11 protection in July.
Under the terms of the $50 billion-bailout it received from the Treasury starting last December, GM agreed to repay the government in two forms: a $6.7 billion loan and a 60 per cent equity stake.
The Treasury plans to start selling off the equity stake after GM launches an initial public offering, the report added.
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