CHICAGO - General Motors on Friday said it plans to sell $10 billion in debt and convertible securities to help shore up its underfunded pension plans and meet other retiree obligations.
GM said the plan doubles its original target for strengthening its balance sheet in 2003 to $20 billion from $10 billion and increasing near-term liquidity to more than $30 billion.
GM said it expects almost all of the proceeds will be used over time to partially fund its U.S. pension funds and other retiree benefit obligations.
The carmaker, whose U.S. pension plans were underfunded by $19.3 billion at the end of 2002, said it expects to make significant cash contributions to these funds by late 2003.
General Motors Acceptance Corp. (GMAC), GM's financial services unit, also will try to raise about $3 billion through debt offerings and plans to use the proceeds to fund ongoing operations, GM said.
GM has said it would contribute about $15 billion to its U.S. pension and retiree benefit plans by 2007. GM contributed $5.8 billion to its U.S. pension and retiree benefit plans during 2002 and another $1.2 billion in GM Class H common stock in 2003.