GM to repay $5.8 billion in loans early

April 20, 2010 at 2:31 PM
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DETROIT, April 20 (UPI) -- General Motors Co. is poised to announce it will repay the U.S. government $5.8 billion two months early, sources told The Detroit News.

GM spokesman Greg Martin declined to comment on the payment, which was also reported in the Detroit Free Press. Company Chairman and Chief Executive Officer Edward Whitacre Jr. plans to announce the payment in Fairfax, Kan., where renewed investment in the plant and additional jobs for Kansas will also be announced, the News reported.

The plan is to use an escrow account set up by the U.S. Treasury to pay the U.S. government $4.7 billion and the Canadian and Ontario governments $1.1 billion.

The U.S. government will remain owners of 61 percent of GM and Canada will keep control of 12 percent, as much of the aid provided to GM last year was converted to equity.

Industry analyst Aaron Bragman said the payment was "an important step on the road to an Initial Public Offering."

From a public relations point of view, the issue is moot, he said. By now, "People have pretty much made up their minds whether the bailout was a good thing or a bad thing," he said.

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