General Motors Corp on Monday announced that it has entered into a memorandum of understanding (MoU) with a buyer for the Hummer SUV, its premium off-road brand.
GM said it expects the sale to close by the end of third quarter of this year, subject to customary closing conditions, including receipt of applicable regulatory approvals. It did not disclose the name of the buyer.
The transaction would secure over 3,000 US jobs in manufacturing, engineering and at Hummer dealerships in the country, it said, adding The investor has agreed to make aggressive investments in hummer.
GM said it has received US bankruptcy court approval to continue honoring all vehicle warranty programmes and dealer incentive plans. The court also granted approval for GM to access a new approximately $33.3 billion debtor-in-possession (DIP) financing facility from the US Treasury and the Canadian and Ontario governments.
The court authorised GM to use up to $15 billion of the facility on an interim basis pending a final order approving the full facility. This credit facility will be used, among other things, for the company's normal liquidity requirements, including employee wages, healthcare benefits, supplier payments, and other operating expenses.
GM said it intends to make payment for goods received and services provided to it on or after the filing date in the normal course of business and in accordance with terms of existing supplier agreements.
In addition, Judge Robert E. Gerber of the US bankruptcy court for the Southern District of New York today also granted approval for a number of other first-day motions that GM made as part of its chapter 11 filings to preserve the value of GM and facilitate an expedited sale of assets to the New GM as a healthy business outside of the chapter 11 context. The orders granted by the court will ensure that the company's business continues to function without disruption. GM has received authorisation to, among other things:
* Respect its operating and financing agreements with GMAC, supporting continued wholesale financing for dealers and retail financing for customers;
* Pay dealers' open accounts;
* Pay essential suppliers and logistics providers for goods and services provided before and after the company's court filings;
* Pay all non-US suppliers to GM Corporation and its US subsidiaries;
* Continue pay and benefits for employees and retirees - however, the amount of non-qualified pension for some executive retirees may be affected;
* Preserves, on an interim basis, GM's tax carryforwards, including a substantial amount of foreign tax credits;
The court also approved, on an interim basis, sale procedures and a hearing date of 30 June for the proposed sale of assets under section 363 of the US Bankruptcy Code. Importantly, the court ordered all banks to honor employee paychecks, including those dated prior to the company's 1 June 2009 court filing.
''Today's rulings provide important assurance to customers and ensure that GM can maintain normal operations as we work to create and launch the New GM. We will proceed with continued focus on meeting the needs of our customers in everything we do,'' GM's president and CEO Fritz Henderson said.
GM earlier today filed under chapter 11 to rapidly implement the sale of substantially all of its assets to the New GM, which will be built from GM's strongest operations and supported by a stronger balance sheet and a competitive cost structure.
GM's sale of assets to the New GM already has the support of the US Treasury, the UAW and a substantial portion of GM's unsecured bondholders, GM expects the sale to be approved and consummated expeditiously.
General Motors Corp., one of the world's largest automakers, manufactures cars and trucks in 34 countries. With its global headquarters in Detroit, GM employs 235,000 people in every major region of the world, and sells and services vehicles in some 140 countries.