Detroit-based automaker General Motors Co. announced Friday that it has paid $1.0 billion to the U.S. Treasury and $192 million to Export Development Canada as per its commitments made on loan repayments to the U.S. and Canadian and Ontario governments. This was revealed in a statement made by GM's Chairman and Chief Executive Officer Ed Whitacre.
GM added that its intends to continue repayments through June 2010, when the balance of a total of $6.7 billion U.S. loans would be paid in full, assuming no downturn in the economy or business.
In a separate release, the U.S. Treasury also confirmed receipt of the first quarterly $1 billion repayment from General Motors as part of the company's accelerated plan to exit the U.S. Government's investments under the Troubled Asset Relief Program or TARP.
GM, which emerged from bankruptcy in July, intends to repay the loans as it will help the company to come out of government control, including pay restrictions. The car maker owes a total of $6.7 billion to the U.S. and $1.14 billion to Canada.
While announcing its first 83 days operating results in November, GM said that it intended to accelerate the repayment of its U.S. government loans with payments beginning in December.
GM added that it planned to repay the US, Canadian and Ontario government loans in quarterly installments from escrowed funds, beginning with an initial $1.2 billion payment to be made in December, followed by quarterly payments. Any escrowed funds available as of June 30, 2010 would be used to repay the loans unless the escrowed funds were extended one year by the U.S.
GM is currently making serious efforts to restore profitability after it availed a $50 billion U.S. government aid and emerged from bankruptcy in July. The company, which had filed for Chapter 11 bankruptcy protection earlier this year, is now partly-owned by the US government.
The U.S. Department of the Treasury owns 60.8% of the GM's common stock, UAW Retiree Medical Benefits Trust holds 17.5%, Canada and Ontario governments owns 11.7% stake in the new company and Motors Liquidation Co. (MTLQQ.PK) holds 10% stake.
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