GM adds $2B to credit line
General Motors Co. said Thursday it has increased its available line of credit by $2 billion and extended its length, moves that help the company with cash on hand for possible acquisitions or to withstand any future economic downturn.
The $14.5 billion credit line includes a $10.5 billion, five-year credit line and a $4 billion, three-year credit line, GM said.
“We believe this larger revolver, along with our $20 billion target cash, will provide appropriate liquidity to enable consistent investment in a downturn to generate strong results,” Chuck Stevens, GM chief financial officer, said in a statement. “In addition, we will also have the financial flexibility within the revolver for potential opportunities that may emerge to advance our strategic plan.”
GM, which is transitioning into a mobility services provider, this year has invested $500 million into the ride-hailing company Lyft Inc. and acquired autonomous vehicle software company Cruise Automation, reportedly for about $1 billion. GM will disclose more about the Cruise Automation acquisition in its second quarter earnings in July.
The automaker reaffirmed its targets to keep $20 billion of cash and have available liquidity of $30 billion to $35 billion, figures it believes are enough to “withstand a severe economic downturn.” The company also said it will continue buybacks of stock.
At the end of March, GM had $18.5 billion in cash available and total liquidity of $30.6 billion.
GM said 44 financial institutions from 13 countries participated in the transaction.
The announcement came after the market closed Thursday. GM stock closed down 1.1 percent Thursday to $31.29 a share.