GM makes first payment of $1 bln to federal gov't

• Source: Xinhua
• [09:16 December 21 2009]
• Comments

US automaker General Motors made its first payment of $1 billion toward its 6.7 billion dollars in outstanding US government loans last Friday, 13 days ahead of schedule, the company said in a statement.

GM's Chairman and CEO Edward Whitacre Jr. also announced that GM had paid $192 million, the company's first installment on its Canadian loans.

"We look forward to continuing repayments through June 2010, at which time the balances will be paid in full, assuming no downturn in the economy or business," Whitacre said in the statement.

The US Treasury swapped about 43 billion dollars of the loans for a 60.8-percent equity stake in GM, while Canadian federal and provincial governments hold an 11.7-percent equity stake in GM in exchange for most of their $10.5 billion in loans.

The Treasury Department estimates that it has lost a total of 30.48 billion dollars of its 81 billion dollars of investment in the auto industry. Based on the value of GM debt, the US government has lost about $25 billion of its investment in GM.

GM announced in November it would make the first quarterly payment on December 31. It also said it would make 200-million-dollar quarterly payments to the Canadian federal and provincial governments against its debt of $1.4 billion.

GM had been required to repay the loans by July 2015.

GM is modestly ahead of its financial plan, in part because it emerged from bankruptcy after only 40 days, shorter than the 60-90days predicted by the company and the Obama auto task force.