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Markets News

BUZZ-GE extends CEO Larry Culp's contract amid turnaround efforts, shares rise

(Updates)

** U.S. industrial conglomerate General Electric Co extends CEO Larry Culp’s contract by two years amid his efforts to turnaround the co and lower its huge debt

** GE shares up 1.4% at $6.36; stock snaps a four-session losing streak

** Culp has made several bets to improve GE’s debt-heavy balance sheet since taking over in Oct 2018, including selling co’s life sciences unit for $21.4 bln, replacing long-time auditor KPMG with Deloitte and hiring a new CFO

** As of June 30, under Culp, GE has cut its industrial debt by $21.2 bln to $34 bln since 2018-end; total borrowings fell to $81.88 bln from $103.60 bln between the same period

** Culp’s renewed contract to last through Aug 2024 with an option to extend by another year; GE also approves one-time equity grant linked to stock price appreciation

** GE’s equity is worth more than the market gives it credit for ... if Larry were to leave, we’d likely abandon our bullish stock call - Morningstar analyst Joshua Aguilar

** Culp joined GE months after the co was kicked out of Dow Jones Industrial Index in June 2018

** The COVID-19 crisis has pummeled demand at GE’s aviation and power businesses; co reported wider-than-expected quarterly loss in July and cash outflow of $2.1 bln

** GE’s shares have fallen 42.2% during Culp’s tenure, down about 43% YTD

Reporting by Rachit Vats, Ankit Ajmera and Sruthi Shankar in Bengaluru

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