Brazil's GM Talking With Gov Lenders; Announces $1 Billion Invest
15 Julho 2009 - 12:57PM
Dow Jones News
General Motors do Brasil Ltda is in talks with two government
banks for long term loans to finish off its planned three-year,
$2.5 billion investment strategy, the company announced
Wednesday.
General Motors Co.'s (GM) Brazilian subsidiary said it signed on
to a roughly $172 million loan with state-run Rio Grande do Sul
Development Bank and is currently in talks with Banco Regional de
Desenvolvimento Economico, BRDE, in south Brazil, and the nation's
leading development bank, BNDES, to cap off its financing
needs.
GM's local chief executive, Jaime Ardilla, announced another $1
billion investment Wendesday. The total completes the planned $2.5
billion announced already this year, and will go to the creation of
two new compact and mid-sized vehicles to be built in Rio Grande do
Sul state, Brazil's southern-most state.
The total $2.5 billion investment is for a revamp of the
assembly lines in Sao Paulo and a redesign and upgrade of 18
Chevrolet models.
Roughly half of the capital needs have come from General Motors
do Brasil. None of the financing is coming from U.S. corporate
headquarters or private lenders.
GM is the third largest car retailer in Brazil, trailing
Volkswagen AG (VLKAY) and Fiat SPA (FIATY). Brazil is General
Motors Co.'s third largest market behind the U.S. and China.
The "new" GM counts Brazil among its many overseas subsidiaries
post-bankruptcy. The U.S. government owns a 60% stake in the new
company because of the $50 billion it invested to keep the company
alive.
The Brazilian subsidiary is financially independent from the
troubled Detroit auto maker and hasn't tapped corporate
headquarters for cash in more than three years, Ardilla said
recently.
-By Kenneth Rapoza, Dow Jones Newswires, 5511-2847-4541,
kenneth.rapoza@dowjones.com