General Motors has extended its available credit line by $3.6 billion, the automaker announced this morning. The move is being made in an effort “to further strengthen [GM’s] liquidity position,” according to a GM press release.
Specifically, the $3.6 billion extension is being added on to GM’s three-year revolving credit agreement due April 2022. When GM initially secured that line of credit in April 2018, it was for $4.0 billion.
As of March 2020, GM’s three credit lines were as follows:
- $10.5 billion, 5-year facility
- $4.0 billion, 3-year facility
- $2.0 billion 364-day facility
The automaker drew down $16 billion in late March from those three lines.
The $3.6 billion extension complements another extension to GM’s credit undertake in April, as the automaker extended its $2 billion, 364-day revolving credit agreement to April 2021. This particular extension appears to be exclusively for GM Financial.
In addition, GM has also suspended its quarterly cash dividend on its common stock, suspended its share repurchase program and has also “taken other significant austerity measures to preserve near-term available cash.”
“We continue to enhance our liquidity to help navigate the uncertainties in the global market created by this pandemic,” said GM Chief Financial Officer, Dhivya Suryadevara. “Fortifying our cash position and strengthening our balance sheet will position the company to create value for all our stakeholders through this cycle.”
GM vehicle production remains down in North America, putting the automaker and its rivals in a precarious financial position. General Motors remains in talks with the UAW union about reopening plants and restarting production as early as May, but an agreement has yet to be reached, as of this writing.