Leftlane announced just days ago that GM intended to pay the U.S. and Canadian loans back on time, if not early. Now GM has officially jumped the payment schedule with its first payment coming in 13 days ahead of its due date.
Ed Whitacre, GM’s chairman and operating CEO released a statement saying, “I am pleased to announce that today, GM followed through on its commitment to begin loan repayments to the U.S. and Canadian and Ontario governments. We paid $1.0 billion to the U.S. Treasury and $192 million to Export Development Canada.”
Whitacre went on to explain GM’s gratitude for the help by both the U.S. and Canadian governments during tough times. Whitacre said that GM intends to fully pay back the government loans by June 2010 notwithstanding major unforeseen economic or industry downturn.
The U.S. government forgave $43 billion in loans in exchange for a 60.8 percent equity stake in GM, and based on GM’s value and debt holdings the U.S. treasury estimates that it has lost $25 billion on its investment in GM.
The Canadian federal and provincial governments have an 11.7 percent equity stake in GM that was given in exchange for the majority of the $10.5 in loans. GM will be making $200 million quarterly payments to the Canadian government and Ontario provincial governments until its $1.4 billion in remaining debt is paid in full.
Upon exiting bankruptcy the U.S. Treasury gave GM $16.4 billion in exit financing to be held in a restricted cash account. GM is using these federal funds in order to pay back the $6.7 billion in TARP loans.
