GM pays back $8.1bn loan in full

GENERAL Motors (GM) has repaid the $8.1bn (£5.2m) in loans it received from the US and Canadian governments at the height of the financial crisis last year.

Detroit-based GM, which emerged from bankruptcy in July 2009, had pledged two weeks ago to repay the balance of loans from the US and Canada “in full by June at the latest.”

“Our ability to pay back these loans less than a year after emerging from bankruptcy is a sign that our plan for building a new GM is working,” GM chief executive Ed Whitacre said.

The loans had outstanding balances of about $4.7bn to the United States and $1.1bn to Canada after accounting for exchange rates.

“It is also an important step toward eventually reducing the amount of equity the governments of the US, Canada and Ontario hold in our company,” Whitacre said.

GM received about $50bn of US government support in its bailout, much of which was converted to common and preferred stock in GM unaffected by the loan repayments.

The US Treasury holds a 60.8 per cent stake in the common stock of GM, Export Development Canada 11.7 per cent, the United Auto Workers healthcare trust 17.5 per cent and old GM, now known as Motors Liquidation, holds 10 per cent.

The carmaker has been preparing for an eventual public offering that would allow the governments to reduce their stakes in GM and earlier in April released the first full accounting of its balance sheet as a restructured company.

GM reported a net loss of $4.3bn for the six months after it emerged from bankruptcy.