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News of  June 13, 2001

Shanghai GM Signs New Financing Agreement 

Buick Sail Production

Photo: GM

Shanghai - Shanghai GM signed today new financing agreements with a total value of $700 million to refinance existing debt and meet future project and working capital requirements. The agreements are comprised of a $600 million syndicated refinancing package and a $100 million bilateral facility. 

The $600 million refinancing syndication includes a $160 million term debt facility in US dollars and a $440 million facility in renminbi for working capital requirements. It was led arranged by Citibank and the Shanghai Automotive Group Finance Company Ltd. (SAICFC). A total of seven foreign banks and eight Chinese banks participated in the syndicate. 

Shanghai GM also signed a renminbi bilateral term loan valued at $100 million with SAICFC, the financing arm of GM's joint venture partner Shanghai Automotive Industry (Group) Corporation, or SAIC. 

The new funding will be used to pay off existing debt and fund anticipated future borrowing requirements. In 1998, Shanghai GM raised the equivalent of $821 million in syndicated debt and the equivalent of $180 million in a bilateral loan with SAICFC. It was the largest deal of its kind at that time. 

"With current financial market conditions and Shanghai GM's strong operating and financial performance over the past two years, we decided this was an optimal time to restructure Shanghai GM's borrowings," said Mark Newman, vice president and Chief Financial Officer of Shanghai GM. 

"We have worked closely with Citibank, SAICFC and all fifteen financial institutions invited to participate in this financing agreement to establish more competitive pricing and lending terms for Shanghai GM," Newman added. "This will help Shanghai GM improve its competitiveness, which in turn will ultimately benefit our customers." 

Since the end of 1998, when Shanghai GM rolled out its first Buick sedan, the company has launched three distinct models onto the market. In the process, it has set a Chinese industry record for the speed of the introduction of new products. 

The $1.52 billion, 50-50 joint venture between General Motors and SAIC sold more than 30,000 Buick sedans and GL8 executive wagons in 2000. Deliveries of the Buick Sail, the first modern compact sedan manufactured in China and Shanghai GM's third model, will begin in two days. Shanghai GM has been profitable in each of its first two years of operation since it commenced production in 1999. 

(June 6, 2001)

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