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| In light of improving global economic conditions, stabilizing industry sales and its healthier cash position, GM announced today that it plans to accelerate repayment of its outstanding $6.7 billion in UST loans as well as the C$1.5 billion (US$1.4 billion) in EDC loans ahead of the scheduled maturity date of July 2015.GM plans to repay the United States, Canadian and Ontario government loans in quarterly installments from escrowed funds, beginning next month with an initial $1.2 billion payment to be made in December ($1.0 billion to the UST and $192 million to the EDC), followed by quarterly payments. Any escrowed funds available as of June 30, 2010 would be used to repay the UST and EDC loans unless the escrowed funds were extended one year by the UST. Any balance of funds would be released to GM after the repayment of the UST and EDC loans.In addition, the company has begun to repay the German government loans which were extended to support Opel, and had a balance of €900 million (~US$1.3 billion) as of September 30, 2009. Opel has already repaid €500 million (~US$0.7 billion) of that in November, and will repay the remaining €400 million (~US$0.6 billion) balance by the end of the month. The cash balance in Europe as of September 30, 2009 was US$2.9 billion.GM’s total debt as of September 30, 2009 was $17 billion, including $6.7 billion in U.S. government loans, $1.4 billion in Canadian government loans, $1.3 billion in German government loans and $7.6 billion in other debt globally. The $17 billion debt level does not include the UAW or CAW VEBA notes or preferred stock, which are $2.5 billion, $0.7 billion and $9 billion, respectively. While GM has reached settlements for the UAW and CAW VEBAs, the debt associated with the agreements will not be recognized until all preconditions are met and they become effective, which will be December 31, 2009 or later. Prior to the start of the new GM, total debt of Old GM was $94.7 billion as of July 9, 2009. |
Looking Ahead
Globally, GM expects total vehicle industry volume to moderate in the fourth quarter of 2009, with an estimated SAAR to be approximately 65.4 million units, down from 67.8 million units in the third quarter. Following the expiration of the successful ‘Cash for Clunkers’ stimulus program in the U.S. which contributed to GM’s strong sales in the third quarter, the company anticipates the U.S. industry total vehicle SAAR volume in the fourth quarter will be approximately 10.7 million units, compared to 11.7 million units in the third quarter. Looking ahead to 2010, GM anticipates modest growth, with total industry volumes estimated at 62 to 65 million units, with a modest recovery in the U.S. market where the outlook for the 2010 calendar year for total vehicles is estimated at 11-12 million units. |
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