Topic: GM pays off remaining loans

[Mitlov]

The US/Canadian bailout of GM consisted of two parts: a $6.7 billion cash loan, and a purchase of 61 percent of the equity stake in GM for a bit under $50 billion.  Well, cross the first part off; $2 billion has already been repaid and the remainder will be paid back tomorrow.

http://www.autoblog.com/2010/04/19/report-gm-to-announce-repayment-of-federal-loans-in-full-on-wed/

As for the equity shares, those will likely be sold off to private investors in an IPO before the end of the calendar year. 

http://www.autoblog.com/2009/09/28/report-general-motor-still-on-track-for-2010-ipo/

With a lot of the fat trimmed from GM (Hummer, Pontiac, and Saab), and the Cruze, the Regal, and maybe the Aveo on dealer lots by that time (with the Malibu, the new Equinox, the Lambda crossovers, the new LaCrosse, and CTS appeasing those people who like bigger cars), I don't doubt that the IPO will bring in enough money through that IPO so that the government will break even, and maybe even profit, on its flipping of GM stock.

So for those who like using the phrase "Government Motors," enjoy it while it lasts, because it looks like you won't be able to use that term in another eight months.

[rrocket]

Any news on when/if they are paying Canada back?

[Mitlov]

Any news on when/if they are paying Canada back?

First sentence of the article I linked:

According to The Detroit News, General Motors will announce that it is fully repaying the federal loans it received last summer from both the United States and Canadian governments.

[rrocket]

Sorry...Link didn't immediately open (work firewall maybe?).  I see it now.  Thanks.

[Sir Osis of Liver]

The US/Canadian bailout of GM consisted of two parts: a $6.7 billion cash loan, and a purchase of 61 percent of the equity stake in GM for a bit under $50 billion.  Well, cross the first part off; $2 billion has already been repaid and the remainder will be paid back tomorrow.

http://www.autoblog.com/2010/04/19/report-gm-to-announce-repayment-of-federal-loans-in-full-on-wed/

As for the equity shares, those will likely be sold off to private investors in an IPO before the end of the calendar year. 

http://www.autoblog.com/2009/09/28/report-general-motor-still-on-track-for-2010-ipo/

With a lot of the fat trimmed from GM (Hummer, Pontiac, and Saab), and the Cruze, the Regal, and maybe the Aveo on dealer lots by that time (with the Malibu, the new Equinox, the Lambda crossovers, the new LaCrosse, and CTS appeasing those people who like bigger cars), I don't doubt that the IPO will bring in enough money through that IPO so that the government will break even, and maybe even profit, on its flipping of GM stock.

So for those who like using the phrase "Government Motors," enjoy it while it lasts, because it looks like you won't be able to use that term in another eight months.

You're obviously controlled by the Pew people, just like Consumer Reports.

[PJungnitsch]

Nice going guys! Looks like the two governments made the right call in difficult times.

[ovr50]

Good for GM and the two govts. Finally, a scheme that seems to be working. 

[Erik]

Excellent!

Nice to be able to say "told ya so" to the naysayers.

Way to go, GM!

[rrocket]

Excellent!

Nice to be able to say "told ya so" to the naysayers.

Way to go, GM!

Yea...maybe all the other companies should declare bankruptcy to avoid paying Class Action lawsuits, recalls, etc...

[Erik]

Excellent!

Nice to be able to say "told ya so" to the naysayers.

Way to go, GM!

Yea...maybe all the other companies should declare bankruptcy to avoid paying Class Action lawsuits, recalls, etc...

Toyota might just try it.

[carcrazy]

It looks like the governments always come on top when it's about making money. I think the US Government is set to make couple of billions from the bank bailouts too.

[initial_D]

6.7B in loan, over 50B to acquire 61% of ownership.

Paying back is like taking money from 1 pocket, and put it into another pocket. Just a Kodak moment to look good for something else later.

[articsteve]

Excellent!

Nice to be able to say "told ya so" to the naysayers.

Way to go, GM!

           

PR bait and switch for dummies the blind and deaf. 

OK ppl, please realize that the "LOANS" were never intended to be actually spent. They were window dressing.  However, GONE is the publics CASH for "EQUITY".   That at the moment has ZERO VALUE.

Canadian & Ontario GOV approx:  10.5 Billion
US Government: approx:             50. Billion
Mexican Government:                 NIL 

The other BACK DOOR infusion of capital is thru the US Treasury and TARP.  Of the 13.4 Billion distributed by TARP to GM what portion of it went directly to support GM sales is not discernible, but 3/4 of GM dealers receive their dealer floor plans thru GMAC and many of it's customer's vehicle are financed thru GMAC.

 

GM's total debt at the end of the third quarter stood at US$17-billion. That included US$6.7-billion in loans to the U.S. Treasury, US$1.4-billion in loans from the federal and Ontario governments, and US$1.3-billion in loans to the German state.

The U.S. and Canadian loans, totalling US$8.1-billion, are tucked away in an escrow account that GM has not tapped. GM said it will use that fund to make the repayments, meaning it is simply paying the governments back with their own money.

The federal government will contribute $7 billion, while $3.5 billion will come from Ontario. In exchange for their commitment, Canada and Ontario will get an 11.7 per cent stake in the equity of the restructured GM.

[i]"We are counting on significant return on the debt portion, but on the equity portion, we’re assuming up front, we will be assuming that that’s a 100 per cent cost," said Harper. "Obviously, it will be something lesser than that in the long term, but we're not making any assumption of getting large amounts of money back."[/i]

Regardless of the sales strategies it uses, GM has to grow substantially to reach the values at which the governments will recover the entirety of their equity investments, according to an analysis this month by the U.S. Government Accountability Office.

GM needs a market capitalization of US$66.9-billion for the U.S. Treasury to break even on its investment, the GOA said. The automaker has never in its history been worth that much. At its peak value in 2000, its market cap was US$57-billion.


The Emergency Economic Stabilization Act of 2008 (“EESA”) ..... GMAC: Treasury has thus far disbursed $13.4 billion to GMAC




http://www.cbc.ca/money/story/2009/06/01/harper-mcguimty-gm.html

http://www.financialpost.com/story.html?id=2227951#ixzz0lbnqsBD2

[rrocket]

^^And they lost 4.3 Billion as the "New GM"...in the first 5 month.

[articsteve]

GM is in huge trouble.

They still have major brand confusion.

They've killed too many dealers off in the last 5 years trying to be like Toyota.

The Euro market is going to h*ll so their Opel gamble is gonna kill them there.

They are losing market share despite providing the largest incentives in the industry.

Best case scenario is they keep breaking even and manage to keep the Canadian operations going for the next 5 years.

[rrocket]

Oh..and they need $12.5 Billion to fund their pensions..

[articsteve]

Oh..and they need $12.5 Billion to fund their pensions..

Oh..and they need $12.5 Billion to fund their pensions..

Another equity swap  .  Can't see those governments coughing up another 12 BILLION.

[toolatecrew]

There fixed the subject line for ya 

People can be so gullible especially when they desperatley hope for any good news.

Its like when we see GM creates 2000 "NEW" jobs. Then you read on and find out that the factory had laid off 10,000 people and now have put in a shift so only 8000 people are out of work instead of 10,000.

Its smoke and mirrors. Like saying we will be healing your hand tomorrow isn't that great..after you were in a fire that burned 90% of your body.

[Thinking Out Loud]

There fixed the subject line for ya 

People can be so gullible especially when they desperatley hope for any good news.

Its like when we see GM creates 2000 "NEW" jobs. Then you read on and find out that the factory had laid off 10,000 people and now have put in a shift so only 8000 people are out of work instead of 10,000.

Its smoke and mirrors. Like saying we will be healing your hand tomorrow isn't that great..after you were in a fire that burned 90% of your body.

'New' jobs does sound better than 'recalled' (pun intended) jobs!   

[Erik]

^^And they lost 4.3 Billion as the "New GM"...in the first 5 month.

Duh!
Like this was gonna turn around overnight.

Wasn't most of that loss in one time payments? Didn't a bunch go to Delphi?