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VOL. 128 | NO. 171 | Monday, September 02, 2013

Report: GE to Spin Off Consumer Finance Business

AP

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General Electric Co. plans to spin off the U.S. consumer lending business of its finance arm with an initial public offering of stock that could come early next year, according to The Wall Street Journal.

The newspaper also said Friday that the Fairfield, Conn., conglomerate is considering smaller spinoffs or asset sales, but it has started preliminary work on the IPO. The paper cited unnamed sources familiar with the matter.

The consumer finance business provides store credit cards to about 55 million people for retailers like Wal-Mart Stores Inc. It accounts for $50 billion of GE Capital's $274 billion in outstanding loans, according to the report.

Aside from its finance business, GE sells a wide variety of industrial equipment and appliances around the world. This includes jet engines, medical diagnostic equipment, oil and gas drilling equipment and washing machines.

GE spokesman Seth Martin declined to comment on the report.

CEO Jeff Immelt told analysts and investors at a conference in May that his company wanted a smaller GE Capital. He said they wanted to reduce the finance arm's assets from $402 billion in this year's first quarter to between $300 billion and $350 billion by the end of next year.

"That is going to create excess cash in GE Capital, and we are going to use that excess cash to buy back stock," Immelt said.

That asset total had dropped to $391 billion by the second quarter, according to Martin.

Immelt said in May that the company still planned to expand GE Capital's core business, which is commercial lending. He also told his audience that capital markets were receptive to IPOs.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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PROPERTY SALES 56 137 4,903
MORTGAGES 88 226 6,452
FORECLOSURE NOTICES 6 25 1,504
BUILDING PERMITS 170 318 11,577
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