ERC parent launches capital initiative on ERC losses

General Electric, parent of Employers Reinsurance Corp. (ERC), says is will launch a US$5 billion global financing initiative.
The move is in response to expected lower earnings in 2002, mainly due to losses in the company’s insurance operations.
At then end of 2002, GE took charges for ERC and GE Capital Corp., towards which the financing will go. The after-tax charge for ERC is expected to be about US$1.4 billion.
Last week, GE announced that fourth-quarter 2002 earnings had fallen 21% and that the company had not reached its usual double-digit earnings growth for the year. Net income for the company was US$3.1 billion, or $0.31 per share, in line with expectations.
GE says it expects 2003 earnings of US$1.50 to US$1.77 per share.