GE cuts some debt using proceeds from sale of biopharma business

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FILE PHOTO: The General Electric Co. logo is seen on the company’s corporate headquarters building in Boston, Massachusetts, U.S. July 23, 2019. REUTERS/Alwyn Scott

(Reuters) – General Electric Co (GE.N) said on Monday it used part of the $20 billion in proceeds from the sale of its biopharma business to cut debt.

The U.S. industrial conglomerate last week pulled its full-year forecast due to the uncertainties created by the coronavirus outbreak, but backed its first-quarter industrial free cash flow expectation of near-negative $2 billion.

GE has repaid $6 billion of its intercompany loan to finance arm GE Capital on April 1 using funds from the biopharma proceeds, it said on Monday.

The company’s total borrowings stood at $90.9 billion as of Dec. 31.

GE Capital launched a tender targeting up to $9 billion of debt maturing in 2020, GE said, using the repayment amount. The unit also repaid $4.7 billion of debt that matured in the first quarter of 2020.

GE, which makes jet engines, power plants and other industrial equipment, last month sold its biopharma business to Danaher Corp (DHR.N) to focus on its core aviation and power businesses.

GE held cash, cash equivalents, and restricted cash of more than $47 billion as of March 31.

The company said that it was launching a strategic debt issuance to fund an immediate tender for GE bonds maturing through 2024, and has also refinanced a back-up credit facility that expires in 2021.

Reporting by Ankit Ajmera in Bengaluru; Editing by Saumyadeb Chakrabarty

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