General Motors said it expects auditors to cast doubt on its ability to remain viable as it endures the worst market in decades. Posting a deeper-than-expected quarterly loss as revenue plunged by more than a third, the automaker said it could receive a “going concern” notice from its auditors.
It will be interesting to see how the auditors, in assessing GM’s viability, value the billions of dollars of government bailout injections. The automaker has asked for up to $30 billion in aid and says it can’t survive without it.
GM argues it is turning the corner on production efficiency, design and quality, but that may be an even harder computation for auditors to crunch than state support.
This morning GM posted a net loss of $30.9 billion for 2008. That would be a record for the 100-year-old company, except it lost $38.7 billion in 2007. Analysts have said the key to valuing GM shares and debt is the progress the company is making in talks with creditors and the autos task force assembled by President Barack Obama to slash debt and secure new funding.
The question of whether GM is a going concern — is that a foregone conclusion?
Deals of the Day:
* Britain’s BG has acquired a 29 percent stake in Australian coal seam gas producer Pure Energy Resources Ltd, Pure said in a statement.
* Children’s television producer Entertainment Rights Plc said it was in advanced talks with bidders for the sale of its units or business and assets.
* Australia’s Babcock & Brown Infrastructure said that it expected to settle the sale of its stake in New Zealand’s Powerco by the end of the day.
* Officials from Indian gas firm GAIL (India) and Oil and Natural Gas Corp will meet on Thursday to discuss a 19 percent stake in ONGC’s planned petrochemical plant, GAIL’s chief said. “We are meeting with ONGC in the evening,” Chairman U.D. Choubey told reporters.