One of many Companies that will have to Cut Dividends
Updated: Apr 29, 2020
Dividends: The Portion of profits given back to investors
General Motors suspends dividend to preserve cash as coronavirus outbreak disrupts production
PUBLISHED MON, APR 27 20208:06 AM EDT - CNBC
GM is suspending its quarterly dividend and stock buybacks to preserve cash during the coronavirus pandemic.
The automaker said it also extended a $3.6 billion, three-year revolving credit facility to April 2022 to help bolster its liquidity.
GM’s U.S. plants have been shuttered since mid-March due to Covid-19.
General Motors said Monday it is suspending its quarterly dividend and stock buybacks to preserve cash as the coronavirus pandemic has left factories and auto dealerships at least partially closed across the U.S.
In addition to cutting the dividend, which paid $1.52 a share annually, GM has “taken other significant austerity measures to preserve near-term available cash,” the company said in a statement. The automaker also extended a $3.6 billion, three-year revolving credit facility to April 2022 to help bolster its liquidity.
Shares of GM were down about 2% to $21.47 during premarket trading Monday. The stock is down 40% this year.
GM’s U.S. plants have been shuttered since mid-March due to the Covid-19 outbreak sweeping across the U.S. The automaker, along with Ford Motor and Fiat Chrysler, are in discussions with the United Auto Workers union to reopen the plants, but union leaders said last week they oppose restarting production in early May announced by several automakers.
GM and Ford are among the only major automakers that have yet to announce a time frame to restart production. Fiat Chrysler earlier this month announced plans to restart production in a week.