According to people with knowledge of the matter, the $3.6 billion cash inflow, planned by General Motors Company (GM) for its unit in South Korea, is to be in the form of loans. At the same time, for investing as much as $750 million in GM Korea, Korea Development Bank (KDB) will be awarded preference shares by the auto maker.
General Motors shares closed lower for a fourth consecutive trading session on Wednesday. The stock went down 0.60% ($0.22) to $36.20, with the intraday high and the intraday low being at $36.70 and $36.16 respectively.
In the week ended on April 29th the shares of the largest vehicle manufacturer in the United States added 0.11% to their market value compared to a week ago, which marked the fourth gain out of five weeks.
However, due to the recent string of losses, the stock has extended its slump to 1.47% so far during the current month, following a 1.10% surge in April. The latter has been the first gain out of three months.
For the entire past year, General Motors shares rose 17.65% following another 2.44% gain in 2016.
Last week GM and state-run Korea Development Bank reached an agreement over a rescue package of $7.15 billion for GM Korea, an amount which also includes a $2.8 billion debt-for-equity swap for existing loans the South Korean unit received from its parent company.
According to a report by Reuters, citing sources and documents, for years General Motors seemed to have ignored calls from South Korea officials to reduce interest rates it charged on loans to money-losing GM Korea.
Still, it remains uncertain if interest rates on the new loans will be more affordable than rates charged on the existing debt.
The sources also said that as much as $800 million of the new loans, provided by GM, would be converted into preferred stock at a later stage.
GM Koreas current shareholding structure will probably remain without change after the deal is finalized.
According to CNN Money, the 21 analysts, offering 12-month forecasts regarding General Motors Companys stock price, have a median target of $48.00, with a high estimate of $70.00 and a low estimate of $30.00. The median estimate is a 32.60% surge compared to the closing price of $36.20 on May 2nd.
The same media also reported that 12 out of 24 surveyed investment analysts had rated General Motors Company’s stock as “Buy”, while 9 – as “Hold”. On the other hand, 2 analysts had recommended selling the stock.
Daily and Weekly Pivot Levels
With the help of the Camarilla calculation method, todays levels of importance for the General Motors stock are presented as follows:
R1 – $36.25
R2 – $36.30
R3 (Range Resistance – Sell) – $36.35
R4 (Long Breakout) – $36.50
R5 (Breakout Target 1) – $36.67
R6 (Breakout Target 2) – $36.74
S1 – $36.15
S2 – $36.10
S3 (Range Support – Buy) – $36.05
S4 (Short Breakout) – $35.90
S5 (Breakout Target 1) – $35.73
S6 (Breakout Target 2) – $35.66
By using the traditional method of calculation, the weekly levels of importance for General Motors Company (GM) are presented as follows:
Central Pivot Point – $37.59
R1 – $38.34
R2 – $39.04
R3 – $39.79
R4 – $40.55
S1 – $36.89
S2 – $36.14
S3 – $35.44
S4 – $34.75