Tuesday, April 20, 2010

You MUST be kidding. Someone tell Ed Whitacre to put down the pipe

That's TOBACCO pipe! I certainly wouldn't be insinuating that GM's CEO is partaking in today's festivities....

But you could see how someone might think he's "partying," given the Op-Ed that just appeared on the pages of the Wall Street Journal. (In print tomorrow).

In an act of insanity, Whitacre takes to the pages of the Journal to congratulate himself on paying back the GM Bailout:

The GM Bailout: Paid Back in Full
Today, General Motors is announcing that it has made a payment of $5.8 billion to the U.S. Treasury and Export Development Canada. We're paying back—in full, with interest, years ahead of schedule—loans made to help fund the new GM.

GM didn't borrow $5.8billion loans, they borrowed over $33BILLION...but the fun fact for Ed to spin is that no sooner was that loan made, than it was turned into equity. That conversion didn't reduce the amount lent, it simply meant they didn't have to repay it!!!!!

Part of me thinks this op-ed made it to the WSJ pages as a setup for the paper to writing a scathing response...

From a recent 10q:

United States Department of the Treasury Loan Facility
On December 31, 2008 Old GM entered into the UST Loan Agreement pursuant to which the UST agreed to provide Old GM with the UST Loan Facility and as a result received total proceeds of $19.4 billion ($15.4 billion in the period January 1, 2009 through July 9, 2009). In addition Old GM issued a promissory note to the UST in the amount of $749 million (UST Additional Note) for no additional consideration.
In connection with the Chapter 11 Proceedings, Old GM obtained additional funding of $33.3 billion from the UST and EDC under its DIP Facility.
In connection with the 363 Sale, amounts borrowed under the UST Loan Agreement and the DIP Facility, excluding the UST Loans of $7.1 billion that we assumed, were converted into our equity. The UST Additional Note was also converted into our equity.

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