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By Matthew Quinn
General Motors on Wednesday made its final payment on $8.4 billion in loans from the US, Canadian and Ontario governments, the automaker said.
The payment of $5.8 billion ($4.7 billion to the US Treasury and $C1.1 billion to Export Development Canada) means the loans were repayed in full and with interest. The repayment comes five years ahead of the loan maturity date and ahead of the accelerated repayment schedule the company announced last year.
"GM's ability to pay back the loans ahead of schedule is a sign that our plan is working, and that we are on the right track. It is also an important first step toward allowing our stockholders to reduce their equity investments in GM," said Ed Whitacre, GM's chairman and CEO. "We appreciate the support the taxpayers have given GM, and our great new products are tangible results of that support."
The Treasury made the loans out of the Troubled Asset Relief Program. Total TARP repayments now stand at $186 billion - well ahead of last fall's repayment projections for 2010, the Treasury said in a statement. With GM's repayment, less than $200 billion in TARP disbursements remain outstanding.
"We are encouraged that GM has repaid its debt well ahead of schedule and confident that the company is on a strong path to viability," said Treasury Secretary Tim Geithner. "This continued progress is a positive sign for our auto investment - not only more funds recovered for the taxpayer but also countless jobs saved and the successful stabilization of a vital industry for our country."
After the GM repayment, the remaining Treasury stake in GM consists of $2.1 billion in preferred stock and 60.8 percent of the common equity.
In a government report issued Wednesday, overall bailout investments in GM, Chrysler and financing arm GMAC by the Bush and Obama administrations will "likely result in some loss," Reuters reported. However, the report added that the Treasury Department anticipates the shortfall to be "much lower" than forecast last year.
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