GE says Japan consumer loan exit may cost $1.1 bln
SINGAPORE, Sept 23 (Reuters) - General Electric Co (GE.N) said its decision to pull out of its Japanese consumer loan business after regulators imposed interest rate caps would cost it up to $1.1 billion.
In a regulatory filing dated Sept. 21, it said it was actively looking for a buyer and expected to complete the sale of the Lake personal loan business by the end of the third quarter of 2008.
"In connection with this exit, we expect to record an after-tax loss in the range of $0.8 billion to $1.0 billion in the third quarter of 2007, which represents the difference between the net book value of our Lake business and the projected sale price," GE said.
"We estimate that the total costs to be incurred in connection with this plan will be in the range of $0.9 billion to $1.1 billion, which includes approximately $0.1 billion of future cash expenditures," it added.
GE decided to pull out of the business after the Japanese parliament approved a lending law that lowers the maximum legal interest rate to between 15 and 20 percent, depending on the size of the loan, from 29.2 percent.
