October 29, 2010
DETROIT (AP) — General Motors Co. says it will cut its debt and pension obligations by $11 billion.
The announcement comes as GM prepares for an initial public sale of company stock.
GM says it will reduce its obligations by buying $2.1 billion worth of preferred stock from the U.S. government. The automaker says it will buy the preferred shares after the initial public offering, which is expected next month.
The U.S. government got a 61 percent ownership stake in GM, plus the preferred stock, in exchange for a $50 billion bailout to get the company through bankruptcy protection last year.
GM will also pay down $2.8 billion owed to a union retiree health care trust fund and pump roughly $6 billion in stock and cash into its underfunded pension plan.