GM clinches $11 bln credit facility amid Opel overhaul

Updated 05 November 2012
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GM clinches $11 bln credit facility amid Opel overhaul

DETROIT: General Motors Co. secured an $ 11 billion revolving credit facility, more than doubling its financial cushion and further strengthening the balance sheet of the largest US automaker.
The additional liquidity comes as GM works to stanch losses at its Opel brand in Europe. GM recently said it was aiming to break even in Europe by the middle of the decade.
The new credit facility replaces a $5 billion line the company secured more than two years ago in the run-up to its initial public offering in November 2010.
The $ 11 billion facility offers better terms as well as the ability to borrow in currencies other than the US dollar, GM said in a statement.
“The new revolver provides a significant source of backup liquidity and financial flexibility, further bolstering our fortress balance sheet,” Chief Financial Officer Dan Ammann said.
The deal gives GM a credit facility comparable to those of other companies close to its size, GM spokesman Dave Roman said. Ford Motor Co, the No. 2 US automaker, boosted its credit facility to $ 9.3 billion earlier this year.
GM’s new credit line consists of a $ 5.5 billion three-year facility and another $ 5.5 billion that matures in November 2017. Its earlier $ 5 billion facility would have matured in 2015.
GM Financial, GM’s in-house finance company, can borrow under the facility.
Thirty-five banks from 14 countries participated in the facility. Ammann said this signaled the financial community’s confidence in GM’s financial condition.
Earlier this year, GM was seeking a credit facility of as much as $ 10 billion, according to people familiar with the matter.
The US presidential race has repeatedly thrown GM into the spotlight, spurring debate about the effect of the company’s 2009 bankruptcy restructuring.
The US government poured $ 50 billion into GM during the financial crisis to help the one-time blue chip avoid liquidation. The US Treasury nearly halved its GM stake during GM’s IPO but still owns 500 million common shares.


For Iranians, economic crisis looms larger than US tensions

Updated 59 min 21 sec ago
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For Iranians, economic crisis looms larger than US tensions

  • Iran’s 80 million people struggle to buy meat, medicine and other staples of daily life
  • Many pointed to the economy, not the possible outbreak of war

TEHRAN: Across Iran’s capital, the talk always seems to come back to how things may get worse.
Battered by US sanctions and its depreciating rial currency, Iran’s 80 million people struggle to buy meat, medicine and other staples of daily life.
Many pointed to the economy, not the possible outbreak of war, as Iran’s major concern. Iran’s rial currency traded at 32,000 to $1 at the time of the 2015 nuclear deal. Now it is at 148,000, and many have seen their life’s savings wiped out.
Nationwide, the unemployment rate is 12 percent. For youth it’s even worse, with a quarter of all young people unemployed, according to Iran’s statistic center.
“The economic situation is very bad, very bad. Unemployment is very high, and those who had jobs have lost theirs,” said Sadeghi, the housewife. “Young people can’t find good jobs, or get married, or become independent.”
Sores Maleki, a 62-year-old retired accountant, said talks with the US to loosen sanctions would help jumpstart Iran’s economy.
“We should go and talk to America with courage and strength. We are able to do that, others have done it,” Maleki said. “We can make concessions and win concessions. We have no other choice.”
But such negotiations will be difficult, said Reza Forghani, a 51-year-old civil servant. He said Iran needed to get the US to “sign a very firm contract that they can’t escape and have to honor.” Otherwise, Iran should drop out of the nuclear deal.
“When someone refuses to keep promises and commitments, you can tolerate it a couple of times, but then certainly you can’t remain committed forever. You will react,” Forghani said. “So I don’t think we should remain committed to the deal until the end.”
Yet for Iran’s youth, many of whom celebrated the signing of the 2015 nuclear deal in the streets, the situation now feels more akin to a funeral. Many openly discuss their options to obtain a visa — any visa — to get abroad.
“Young people have a lot of stress and the future is unknown,” said Hamedzadeh, the 20-year-old civil servant. “The future is so unknown that you can’t plan. The only thing they can do is to somehow leave Iran and build a life abroad.”