General Electric (GE) - Get Report shares rose after the industrial group said Monday that it’s refinancing some debt and paying back some, too, as it seeks to deal with the "material adverse impact" of the coronavirus epidemic.
As for the refinancing, “to extend its industrial debt maturities and enhance its liquidity profile, GE is launching a strategic debt issuance to fund an immediate tender for GE bonds maturing through 2024,” the Boston company said in a statement.
To pay down debt, GE is using the $20 billion it received for selling its BioPharma unit March 31 to Danaher.
GE will use part of the money to repay $6 billion of its inter-company loan to GE Capital. In addition, GE Capital is launching a tender for up to $9 billion of debt maturing in 2020. And GE Capital repaid $4.7 billion of debt that matured in the first quarter.
“With net proceeds of about $20 billion from the sale of BioPharma now in hand, we are taking swift actions to derisk and delever our balance sheet and prudently manage our liquidity amid a challenging external environment,” Chief Executivie Lawrence Culp said in a statement.
“We continue to execute on our priorities, including solidifying our financial position by further reducing debt and improving our cash operations and management.”
GE shares have been down since July 2016 amid poor performance in its power and GE Capital units. Culp had made progress in righting the company until the coronavirus hit.
The stock is down 41% over the past three months. The shares recently traded at $6.90, down 3.4% from Thursday.