General Motors announced this morning that it plans to begin paying back loans to the governments of the United States, Canada and Ontario in December. The automaker will pay back $1 billion to the U.S. Treasury and $192 million to Export Development Canada. In total, GM received about $50 billion in government funding.
GM will continue making $1 billion payments each quarter until its initial public stock offering. GM’s stock offering isn’t expected until the second half or 2010 at the earliest. The automaker says that its total debt as of the end of last month is $17 billion, although an additional, but unclear, amount of debt lies in bankruptcy with the so-called Old GM.
About $43 billion of the government’s loan was exchanged for a 60.8 percent stake in the company. That portion of the loan isn’t expected to be repaid until GM goes public. However, former car czar Steve Rattner says taxpayers will likely lose $25 billion on that deal.
Additionally, GM will repay Canadian governments about $200 million each quarter. GM owes Canada and the province of Ontario $1.4 billion. Another $10.5 billion in Canadian loans was rolled over into an 11.7 percent stake in GM.
Opel loans
The automaker has also begun to repay the German government for the loans extended to support Opel, its European subsidiary. Opel has about $2.9 billion on hand and, earlier this month, it repaid $700 million to the government. It expects to repay an additional $600 million by the end of this month.
Although still not clear of financial trouble, the latest news would put GM slightly ahead of schedule in its turnaround plan.
