Moody's: GE Asset Sales Could Leave $22 Billion to De-Lever, De-Risk
February 22 2019 - 10:31AM
Dow Jones News
By Colin Kellaher
General Electric Co.'s (GE) divestiture program could leave the
struggling conglomerate with $22 billion to deal with debt and
other liabilities, Moody's Investors Service said Friday.
The ratings agency said GE's proceeds from asset monetizations
from 2018 to 2020, combined with free cash flows, could total $50
billion, leaving up to $22 billion of surplus funds after taking
into account already planned cash uses.
Moody's said GE can use that money to pare its debt load more
quickly than planned and to help manage its contingent liabilities,
including the possible need to further increase GE Capital's
statutory insurance reserves for long-term care policies."
The agency cautioned, however, that the planned divestitures,
which include GE Transportation and GE Healthcare, will put a large
dent in GE's cash flows.
Moody's in October cut GE's credit rating by two notches to
Baa1, just three notches above "junk" territory, and the agency has
warned that it could downgrade GE if its leverage ratio doesn't
steadily drop toward less than three times.
Write to Colin Kellaher at colin.kellaher@wsj.com
(END) Dow Jones Newswires
February 22, 2019 11:16 ET (16:16 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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