GM CEO: Cash Position Allows Investment Into Business
November 16 2009 - 11:12AM
Dow Jones News
General Motors Co. on Monday said its cash pool sits at $42.6
billion, $17.4 billion of which is already committed to existing
liabilities.
The auto maker, in its first post-bankruptcy release of
financial results, reported positive cash flow since emerging from
bankruptcy protection in a reversal from massive cash burn before
GM's government bailout.
But the company warned its cash flow will again be negative in
the fourth quarter, when it will pay out $2.8 billion to former
parts arm Delphi Corp. (DLPIV) and begin repaying U.S. and Canadian
government loans.
Of GM's total liquidity, $17.4 billion remains in an escrow
account of government loans. The other $25.2 billion is in an
unrestricted account, from which GM can draw to fund anything
including restructuring and investments overseas.
The level remains well above the $11 billion to $14 billion the
company has said it need to run its business.
The figures are preliminary and are likely to change as GM
reworks its balance sheet to meet federal accounting standards.
But they provide a glimpse into GM's cash needs and its
operations since emerging from bankruptcy protection on July
10.
Post-bankruptcy GM has $135.6 billion in liabilities, down from
$214.2 billion at the former company, or Old GM.
The auto maker reported $17 billion in liabilities, including
government loans, payments owned to part suppliers and other
expenses. Old GM had $94.7 billion on its balance sheet as of July
9.
"The balance sheet has been significantly deleveraged," GM Chief
Executive Fritz Henderson said Monday. "We expect to be in a
healthy position where we can support investment into out
business."
-By Sharon Terlep, Dow Jones Newswires; 248-204-5532;
sharon.terlep@dowjones.com
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