General Motors’ hard-won “investment-grade” credit rating could be at risk if a group of dissident investors succeeds in enforcing demands for an $8 billion buyback of the company’s stock.
Harry Wilson, who once held a spot on the Obama administration’s auto task force, leads a group of four hedge funds that control 2% of GM’s stock that want to see the program implemented.
Wilson, who is also seeking a seat on the board, contends GM is overcapitalized and has excess cash that should be returned to shareholders and by extension boost the value of the company’s shares. The automaker with its “fortress balance sheet approach” has about $25.2 billion in cash and securities plus another $12 billion in credit, according to SEC filings. (more…)