General Electric (NYSE: GE) announced that it has entered into a $ 15 billion unsecured revolving credit agreement with 32 banks. The new credit facility replaces a $ 20 billion revolving credit facility that was scheduled to expire in May 2021.
The closing of this agreement also terminates a credit facility that was due to expire in December 2020, which had a commitment amount of $ 4 billion remaining after the closing of the sale by GE Healthcare of its BioPharma Unit To Danaher (NYSE: DHR).
GE has made efforts to consolidate its balance sheet and increase its financial flexibility. The sale of BioPharma to Danaher provided the company with net proceeds of approximately $ 20 billion. As a result of the deal, GE used $ 6 billion of the proceeds to repay an intercompany loan to GE Capital on April 1. GE Capital, in turn, paid off $ 4.7 billion in debt.
Following the finalization of the sale of BioPharma, GE CEO Larry Culp described the company’s tax measures as a “multi-year transformation, bolstering our significant sources to reduce risk on our balance sheet and continue to strengthen our financial position.” .
Withdrawals from the new credit facility can be used for general business purposes, depending on the company’s record. It includes a financial covenant of net debt to EBITDA, and can be redeemed early without penalty before its maturity date of April 17, 2023.
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