GM looking to expand their credit line
Rumor has it that General Motors is in early stages of talks with banks about expanding its credit line by as much as $5 billion, a person familiar with the discussions said.
GM, based in Detroit, may seek $4 billion to $5 billion in additional revolving credit from some of the banks that provided its current line of credit, said the person, who asked not to be identified because the matter is private.
GM, in an e-mail, declined to comment.
The automaker has "substantial cash requirements going forward," including pension obligations and reinvesting in operations, according to an Aug. 3 regulatory filing.
GM had $32.6 billion in cash and marketable securities on hand on June 30. It also has a $5 billion revolving credit line that was set up in October 2010, according to the filing.
"While we do not believe that we will draw on the secured revolving credit facility to fund operating activities, the facility provides additional liquidity and financing flexibility," GM said in the filing.
The company was revamped in a government-backed bankruptcy in 2009.
CEO Dan Akerson faces a slide in GM's share of its home market to 18 percent through July from 20 percent a year earlier. Akerson also wants to end losses in Europe that have totaled $16.8 billion since 1999.
The negotiations about the new credit were reported Friday by the Wall Street Journal, which cited people with knowledge of the talk it didn't identify. The Journal also said GM hadn't made an official request to banks. Autonews.com