General Electric Co. is expected to gain $38 billion in additional resources from asset sales as it continues to make progress in its deleveraging efforts, CEO Lawrence Culp Jr. said in a Sept. 12 investor conference.
Culp said 2019, a "reset" year for GE, has been "fundamentally in line" with expectations as of early September, when the company announced that it would pare down its stake in Baker Hughes a GE company below 50% through a share sale that had estimated proceeds of $2.47 billion.
"That, coupled with the exit of Wabtec — now that we're out fully — in addition to the prospect of the biopharma [unit sale] closing before too long, really sets us up for about $38 billion of sources," Culp said.
Following that deal, there is still "a lot of wood to chop" around GE's business portfolio, particularly in power, renewable energy and even in the corporate arm, according to Culp. He said the headcount in those segments has declined by 20% over the last 18 months.
"We know we have a lot more to do both with respect to the balance sheet and the way we run the business," Culp said.
Culp's comments followed tender offers to repurchase up to $5 billion worth of existing debt announced by GE earlier in the day. He said the debt buyback plan shows how GE intends to use the additional resources it will reap from asset sales.
GE said it will continue to evaluate potential deleveraging actions, including pension funding and repaying loans from GE to GE Capital.
