General Motors to drawdown about $16 billion from its revolvers

By Rebecca Melvin

New York March 24 – General Motors Co. intends to drawdown about $16 billion from its revolving credit facilities and has suspended financial guidance, the company said in a news release.

Both measures are being taken due to the impact of the Covid-19 pandemic.

The drawdown is being taken to increase the company’s cash position and preserve financial flexibility in light of current uncertainty in global markets resulting from the pandemic.

The funds will supplement the company's $15 billion to $16 billion cash position expected at the end of March.

“We are aggressively pursuing austerity measures to preserve cash and are taking necessary steps in this changing and uncertain environment to manage our liquidity, ensure the ongoing viability of our operations and protect our customers and stakeholders,” Mary Barra, GM chairman and chief executive, said in the release.

In addition, GM Financial had $24 billion of liquidity at the end of 2019 and expects to end the first quarter with similar levels of liquidity. This level is targeted to support at least six months of cash needs, including new originations, without access to capital markets. GM Financial is managing below its target leverage ratios.

The company paid a $400 million dividend to stockholders for the first quarter and said it plans to pay the $400 million dividend in the second half.

General Motors is a Detroit-based automaker.

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