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Bank of America says increased probability of GM filing for bankruptcy
New York: Shares of American car maker General Motors fell to a 13-year low after one of America's biggest banks raised the probability of General Motors filing for bankruptcy protection to 40 per cent yesterday. The Bank of America made the observation after the car maker said it would have to restate its profits after uncovering accounting errors.

The shares fell after the company admitted it would have to restate its profits from 2001 by as much as US$400mn.

The world's largest car maker had flirted with bankruptcy in the early 1990s, but had managed to avoid filing for Chapter 11 bankruptcy protection then. Analysts now say that it may not be so fortunate this time. Bank of America now says that it has raised the probability that GM would have to file for bankruptcy protection in the next two years from 30 per cent to 40 per cent.

In a filing with the Securities and Exchange Commission, GM said its 2001 earnings were overstated by approximately US$300mn to US$400mn. In a statement, the audit committee of GM's board warned investors not to rely on GM's financial statements for 2001.

Earlier, GM had restated its losses for this year's second quarter after it overestimated the value of its 20.1 per cent stake in Fuji Heavy by 57 per cent. As a result, losses for the quarter have almost quadrupled to US$1.07bn from US$286mn.
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Daimler sells Mitsubishi stake to Sachs
Tokyo/Frankfurt: DaimlerChrysler AG has finally pulled out of Mitsubishi Motors Corp. (MMC) by selling its entire 12.42 percent stake in the Japanese car maker to investment bank Goldman Sachs.

Sachs will place the shares with institutional investors around the world, according to market sources.

DaimlerChrysler is the world's fifth-biggest car-maker, while Mitsubishi is Japan's only unprofitable car-maker.

Stuttgart-based Daimler, still has some close operational tie-ups with MMC such as the joint development of engines and vehicle platform sharing and has said that existing projects with MMC would not be affected by its disposal of MMCs shares.
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Dell steps back from target of US$80bn in sales by 2009
Round Rock, USA: Dell Inc. Chief Executive Officer Kevin Rollins stepped back from the company's stated target of reaching US$80bn in sales within four years and said the company now had no time frame for reaching it. The revised guidance comes on the back of the company posting its slowest sales gains in more than three years.

Dell, which for the past three years has generated sales growth averaging 18 per cent a quarter, yesterday reported third-quarter gains of 11 per cent, the sixth straight period of slowing growth.
Dell has forecast 9 per cent to 11 per cent growth this period. It is likely that Dell also will miss a target of reaching US$60bn in sales this fiscal year, a goal earlier brought forward by the company from a previous prediction of 2007.

Dell's rise to fame and fortune had come on the back of selling inexpensive PCs. This year it changed its strategy to focus on higher-profit systems. The shift in strategy hurt revenue as customers purchased mostly low-priced PCs for the back-to-school season from rivals including Hewlett-Packard.
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