GE Capital Divestitures in 2015 Reach $157 Billion
JAN 7, 2016 - 7:00 am
In its effort to divest most of GE Capital, GE signed $157 billion in transactions and closed transactions of $104 billion in ending net investment during 2015.
“We continue to execute the sale of GE Capital assets with a focus on speed, value and certainty. There is an active sales process ongoing for our remaining international businesses while we continue to close the deals we signed earlier,” said Keith Sherin, GE Capital chairman and CEO. “As we shrink our risk-weighted assets, we will be returning the excess capital back to GE.”
As previously announced, GE is embarking on a strategy to focus on its industrial businesses and is selling most GE Capital assets. GE will retain the financing businesses that directly relate to GE’s industrial businesses, including GE Capital Aviation Services, GE Capital Energy Financial Services and GE Capital Healthcare Equipment Finance.
“I’m so proud of what the GE Capital team has accomplished since our strategic announcement in April. We’ve completed the sales of businesses with franchise risk, have reached sales agreements on the vast majority of our U.S. businesses, completed the Synchrony split off, completed the $36 billion debt exchange, and completed the internal reorganization of GE Capital,” said Sherin. “We are on track to file for SIFI de-designation in the first quarter of 2016 and to largely complete the GE Capital divestiture by the end of 2016.”
In the last few weeks of 2015, GE Capital closed several transactions including GE Capital’s position in the Middle Market Growth Program, representing about $0.6 billion of ENI and various closings in the GE Capital Real Estate portfolio representing about $0.4 billion of ENI. In addition, in 2016 the sale of GE Capital Railcar Services (railcar leasing) in North America to Wells Fargo will close, representing about $2.8 billion of ENI.
Combined, these transactions will contribute approximately $1.4 billion of capital to the overall target of approximately $35 billion of dividends expected to GE under this plan.
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