General Electric Co. refuted a statement claiming the company would return a “$3.2 billion tax refund” for 2010, following criticism of its tax rates and policies. “It is a hoax,” said Anne Eisele, a GE spokeswoman. The statement, which purported to be from GE Communications, claimed the Fairfield, Connecticut-based company was responding to a “public outcry” and would “allow the public to decide how to spend” the returned money. [Bloomberg]
General Electric
GE Pays $50 Million to Resolve SEC Accounting Probe [Bloomberg]
Former GE Chief Jack Welch Expects Full Recovery From Discitis [Bloomberg]
We’re rooting for Jobs now based on this connection.
It is no secret that GE Capital has been the lodestone for GE. What looked like a bit of genius, the vertical integration of finance for the customers of GE’s manufacturing and power interests, quickly ran wild in consumer finance and developed a highly opaque balance sheet that has left investors jumpy and hinted at large, unknowable liabilities. Well, GE wants you to just settle the hell down now.
Speaking at an investor conference, Chief Financial Officer Mike Sherin said that 93% of the diversified conglomerate’s long-term debt funding — between $42 billion to $45 billion — is complete for this year and that there is no need for having to tap any external capital. Further, he said the Fairfield, Conn.-based company is “committed” to GE Capital, its troubled financial arm, and hinted a spin-off was unlikely.
Michael Neal, the chief executive of GE Capital, said that in a worst-case scenario, his business unit could face credit losses of up to $13.7 billion this year. However, the unit is predicting 2009 losses of $9.7 billion.
It says something that losses of only $9.7 billion are good news, but almost any number, if it was believed, would do something to avoid the cosmic censorship beyond the event horizon of GE Capital’s balance sheet.
General Electric execs seek to strike optimistic tone [Marketwatch]
We know we aren’t the only ones who enjoy watching the folks at CNBC agonize over their evaporating “performance aligned long-term compensation.” Given where GE stock is headed after the ix-nay on the ividend-day (presently down about 9% 10% after recovering a few percentage points from the low point) we bet it is a volatile day for GE stock options. Whew!
So what are we to make of CNBC breaking news like “GE: Claims that we will be required to raise new near term capital are ‘inaccurate’”? I think we know what we are to make of them, don’t you? Fun!
WSJ Breaking: GM Agreed to Settle with the SEC Over a Probe Related to Accounting Violations
By Bess LevinHonestly, is no one immune?
We hear on the rumor mill that UBS has downgraded GE on the dilution effects new equity issues are likely to have. GE looked like a genius for being in the finance business, both for the returns, and to boost sales by having tight control over underwriting for their more cash challenged customers. Today, that division is, of course, a huge weight around GE’s neck. GE enjoyed the fruits of yesterday’s rally. The stock hadn’t flirted with the teens since 2003, and watching it slip below $20 recently was a bemusing, if sad, experience. No word on what Jack may have called Jeff in the later hours of those days.
Charty Goodness after the jump.
Update: Added 10 year and 5 days charts to satisfy some irate (but erroneous) commenters.
A Persian Gulf sovereign wealth fund has agreed to an $8 billion partnership with General Electric in a deal that will make it one of GE’s top ten shareholders. Abu Dhabi’s Mubadala Development and GE are cooperating on a commercial finance division focussed on the Middle East and African markets. The deal anticipates further partnerships in aviation and clean energy research.
Each company will contribute $4 billion of equity to the partnership over three years. At the same time, Mubadala Development will buy at huge stake in GE, the world’s twelfth largest company. Bank of America is the 10th largest shareholder of GE, with 1.2 per cent worth $3.3 billion at current prices. The largest institutional shareholder is Barclays Global Investors, which owns almost four per cent of GE.
Mubadala and GE in strategic partnership, $8 billion finance venture [The National]
- Use the Bloomberg command
NH BLG_DEALBREAKER <GO>
to access Dealbreaker
