General Motors Co. (GM) - Get Report scrapped its 2020 earnings guidance Tuesday and said it would tap a standby credit facility for around $16 billion, citing g the economic 'uncertainty' linked to the coronavirus pandemic.
GM said it will drawdown around $16 billion from its revolving credit facility in a "proactive" measure to shore up its balance sheet and boost its cash position. The biggest U.S. carmaker also said it would scrap its full-year profit guidance, which had previously forecast adjusted earnings in the region of $5.75 to $6.25 per share and operating cash flow in the region of $13 billion to $14.5 billion.
"We are aggressively pursuing austerity measures to preserve cash and are taking necessary steps in this changing and uncertain environment to manage our liquidity, ensure the ongoing viability of our operations and protect our customers and stakeholders," said CEO Mary Barra.
"Over the past several years, we have made necessary, strategic decisions and structural changes that have transformed the company and strengthened the business, better positioning us for downturns," she added.
GM shares were marked 8% higher in early trading following the update to change hands at $18.94 each, although that move would still leave the stock with a year-to-date decline of more than 50%.