GE and GE Capital debt-riddled, downgraded by S&P
General Electric (GE) has been hit with another blow as Standard & Poor’s (S&P) downgraded the credit ratings of both the company and its finance arm, GE Capital. The move comes after years of financial struggles and debt woes for the once-mighty industrial conglomerate.
S&P lowered GE’s rating one notch from BBB+ to BBB, citing concerns about the company’s ability to achieve its goals for reducing debt and strengthening its balance sheet. The agency also lowered GE Capital’s rating from BBB- to BB+, signaling a higher risk of default for the finance arm.
For GE, the downgrade adds to a series of setbacks that have plagued the company in recent years. Once considered a bellwether of the American economy, GE has struggled to recover from a series of missteps and strategic blunders under former CEO Jeff Immelt. The company’s share price has plummeted, its dividend has been slashed, and it has been forced to divest many of its once-core businesses to raise cash and reduce debt.
GE Capital, once a major player in the financial services industry, has also faced challenges in recent years. The finance arm was hit hard during the 2008 financial crisis and has struggled to recover since then. S&P’s downgrade reflects concerns about the company’s ability to manage its debt and generate sufficient profits in a highly competitive market.
In response to the downgrade, GE issued a statement saying it remains committed to its turnaround efforts and is confident in its ability to improve its financial performance. The company has outlined a plan to reduce debt and boost profitability by focusing on its core businesses in aviation, healthcare, and renewable energy.
Investors, however, remain skeptical about GE’s prospects. The company’s share price has continued to decline following the downgrade, and some analysts have raised concerns about its ability to meet its debt obligations in the future.
The downgrade by S&P is a sobering reminder of the challenges facing GE as it struggles to regain its footing in a rapidly changing global economy. The company’s new CEO, Larry Culp, faces an uphill battle to restore confidence among investors and stakeholders, and to turn around a company that was once a symbol of American industrial prowess. Only time will tell if GE can successfully navigate its way out of its current financial troubles and regain its former glory.
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