FT: GM Looking for "Cash Injection." Deadline Looms.

Robert Farago
by Robert Farago
ft gm looking for cash injection deadline looms

Now tell us something we don’t know. “Such an investment would be along the lines of Warren Buffett’s recent purchases of minority stakes in General Electric and Goldman Sachs, The Financial Times reports. “While private investors are searching for ways to deploy capital through minority investments, many such deals, including the capital infusion by TPG into Washington Mutual, have struggled or failed.” In other words, good luck with that. “One banker questioned GM’s chances of finding an outside investor. ‘I just don’t think most private equity guys are that enamoured of the auto industry and I don’t know how you could try to secure it in some way.'” And check this: GM’s friendly neighborhood automotive analyst, JPMorgan’s Himanshu Patel, says sliding sales in North America and Europe make 2009 “uniquely painful” for the Big 2.8. “Mr Patel expects GM’s cash outflow to reach $12.4bn next year compared with his earlier estimate of $7.9bn. Such a drain implies that GM will breach the mid-point of its minimum required cash reserves of $11bn-$14bn by mid-2009.”

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  • Indi500fan Indi500fan on Oct 22, 2008

    "can GM last long enough to collect the bailout?" definitely with Dems in DC, it's a lock for the UAW look at the Delphs: 3 years in Chap 11 and still rockin' on what the General did for the Delphs, the US Gov will do for GM

  • John Horner John Horner on Oct 22, 2008

    "I just don’t think most private equity guys are that enamored of the auto industry" See Kirkorian, Kirk re: Ford shares sold at massive loss!

  • Samuel L. Bronkowitz Samuel L. Bronkowitz on Oct 22, 2008

    Companies *never* give the unvarnished truth when telling bad news. toxicroach has got it right... look for it to happen even sooner.

  • Joeaverage Joeaverage on Oct 22, 2008

    Educate me - so if the value of GM drops to near nothing and some investor pops up and buys say 70% of GM - can they clean house and make the changes that they see fit?