GM spent $6.5B on Delphi, pensions, Canadian subsidiary

November 2, 2009 http://detnews.com/article/20091102/AUTO01/911020395

GM spent $6.5B on Delphi, pensions, Canadian subsidiary

ROBERT SNELL AND DAVID SHEPARDSON
The Detroit News

General Motors Co. has spent $6.5 billion paying off obligations related to Delphi Corp.’s exit from bankruptcy, funding pension plans and buying shares in a Canadian subsidiary.

In a filing made late this afternoon with the U.S. Securities and Exchange Commission, GM also disclosed it had $16.4 billion in unused government loans after it emerged from bankruptcy last summer.

But GM didn’t reveal how much remains in the escrow account. The government must approve withdrawals from the fund.

GM, which has resisted disclosing how much it had in escrow, revealed in the filing it withdrew $2.8 billion to acquire a membership interest in the new Delphi Automotive LLP and acquire Delphi’s global steering business from its former parts unit.

GM, which emerged from bankruptcy court July 10 and has received about $50 billion in federal aid, agreed last month to help fund the Troy-based auto supplier’s exit from bankruptcy.

In September, GM also withdrew $2.8 billion to fund pension plans of General Motors of Canada Limited, a wholly-owned subsidiary. The Canadian and Ontario governments loaned GM $9.5 billion.

And on Sept. 2, GM withdrew about $928 million, which was spent relating to an agreement between GM and Export Development Canada, a company wholly-owned by the Canadian government. The same day, GM of Canada contributed $1 billion to fund its pension plan.

GM is expected to provide more detail on its financial health when it files third-quarter financial results by mid-November. Officials said GM will report it is still losing money in North America and Europe, but has performed well in Latin America and Asia. GM’s board is set to meet tomorrow.

GM also disclosed that as a result of a $417 million rights offering it has upped its stake in its South Korean unit GM Daewoo from 50.9 percent to 70.1 percent. GM used its cash reserves to boost the stake.

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