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GE Infuses $4B Cash to Cut Liabilities

Dec. 9, 2020
The corporate giant is prefunding pension obligations and retiring intra-company loans in order to reduce debt, de-risk its balance sheet, and accelerate “transformation.”

General Electric has made a $4-billion voluntary effort to improve its balance sheet, voluntarily pre-funding $2.5 billion in pension requirements into 2023, and repaying a $1.5-billion intra-company loan to its GE Capital unit. "Including today's announced actions and scheduled maturities in the fourth quarter, GE will reduce debt by ~$14.5 billion in 2020 - including $9.6 billion in GE Industrial debt and $4.9 billion in GE Capital debt -- and by ~$28 billion since the beginning of 2019," according to a release.

“With these balance-sheet actions, along with the series of proactive actions we’ve taken this year, we continue to execute on our commitment to solidify GE’s financial position,” GE Chairman and CEO H. Lawrence Culp, Jr., said. “With line of sight to at least $2.5 billion of Industrial free-cash flow in the fourth quarter and positive free-cash flow in 2021, these steps further reduce debt, de-risk our balance sheet, and put us on stronger financial footing to accelerate GE’s transformation.”

According to GE, the pre-payment of the pension obligations is less than had been forecast because its pension assets have performed better during the current year.

“We remain committed to maintaining elevated liquidity amid an uncertain environment and achieving our leverage goals over time,” Culp added.

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