GM Plans to Infuse Pension Plans With Six Billions Dollars

General Motors Co. reported last week that in advance of its planned initial public offering, it took a series of steps aimed at reducing debt, shoring up its financial position, and funding the company's pension plans. GM said it repaid $2.8 billion on a 9 percent secured note provided to the United Auto Workers Retiree Medical Benefits Trust. In addition, GM obtained a $5 billion five-year revolving credit facility from a syndicate of banks, and plans—on completion of the IPO—to purchase all $2.1 billion of 9 percent Series A preferred stock held by the Treasury Department. GM also plans to contribute at least $4 billion in cash and $2 billion in common stock to its hourly and salaried pension plans. The stock contributions to the pension plans are subject to Labor Department review, and the number of shares will depend on the offering price for GM common stock, GM said. It will be valued as a plan asset for pension funding purposes at the time of contribution and for balance sheet purposes when the shares become fully transferable, the company said.