General Motors Company(NYSE:GM) has reportedly secured a credit facility worth $11 billion, more than doubling the financial cushion and thereby reinforcing the balance sheet of the largest automaker in the US.
The additional liquidity could find its use in funding a number of strategic goals of GM that take into account while breaking even in Europe by mid-decade and a probable purchase of Ally Financial’s European and Latin American auto loan operations.
The new credit facility replaces a $5 billion line that was secured by the company more than 2 years back in the run-up to its initial public offering sometime in November of 2010.
It proposes better terms and the capability to borrow in currencies other than the US dollar, as told by GM in a statement on Monday.
Chief Officer of GM, Dan Ammann said that the new revolver offers a crucial source of backup liquidity and financial litheness, further supporting the company’s stronghold balance sheet.
35 banks from 14 nations have taken part in the agreement.
Dave Roma, a spokesman of GM said that the contract provides GM with a credit facility that can be compared to those of other nations close to its size. The second largest automaker in the US boosted its credit facility to $9.3 billion this year.
The new credit line adopted by GM covers a $5.5 billion three-year facility and another $5.5 billion that is slated to mature in November, 2017.
Under the conditions, GM’s in-house finance company is in a state to borrow.
It was earlier this year when GM was looking for a credit facility of as much as $10 billion, as per a few people having knowledge regarding the matter.
The US government has invested $50 billion into GM during the period of financial crisis. The US Treasury nearly halved its stake in GM during the company’s IPO.