GM To Repay $6.7 Billion Loan Before June
DETROIT (AP) — General Motors Co. will fully repay the $6.7 billion loan portion of its U.S. government aid earlier than its previously promised payback date of June, a person briefed on the plans said Monday.
GM CEO Ed Whitacre will announce details of the repayment during a visit Wednesday to the company's Fairfax Assembly Plant in Kansas City, Kan., said the person, who did not want to be identified because the announcement has not been made.
Whitacre will travel to Washington, D.C., after the announcement to meet with House Speaker Nancy Pelosi and the Michigan congressional delegation.
The company has received a total of $52 billion in U.S. government aid, with the $6.7 billion considered a loan. The rest would be repaid when the company sells stock to the public, perhaps later this year.
GM already has made two $1 billion payments, leaving a $4.7 billion balance on the U.S. loans.
Company spokesman Tom Wilkinson would not comment on the purpose of Whitacre's visit to the factory, which makes the Chevrolet Malibu and Buick LaCrosse midsize cars.
GM said during its fourth-quarter earnings announcement on April 7 that it planned to repay the money by June, five years ahead of schedule.
Repaying the loan has been a top priority for Whitacre. The government's autos task force set a repayment deadline of 2015 as a condition of giving GM the loans last year.
Once the loans are paid back, GM would still owe $45.3 billion to the government. That will be repaid with the stock offering, which GM Chief Financial Officer Chris Liddell said would take place "when the markets and the company are ready."
Liddell said earlier this month that GM could report a profit as early as this year. GM said it lost $3.4 billion in the fourth quarter of 2009 on revenues of $32.3 billion.
The U.S. government owns about 61 percent of the Detroit automaker, which came in exchange for the aid.
It also will repay early the $1.4 billion borrowed from the Canadian and Ontario governments, the person said. The company already has repaid $384 million.