General Electric (GE, $8.58) CEO Feels An "Urgency" To Reduce Leverage, Wants To Sell Assets

General Electric CEO Larry Culp says the company’s problems can’t be fixed overnight. "We didn't get to where we are in six weeks so it's going to take a while,” Culp told CNBC on Monday. Culp also said he feels the "urgency" to shrink the company's leverage and plans to do so through asset sales.

Under Culp’s leadership, GE's dividend  has been reduced to a penny, and  the conglomerate took a $22 billion accounting writedown.  Culp mentioned Monday that he is planning to reduce debt further by raising cash through a possible IPO of its healthcare business, sale of its transportation unit and by exiting its Baker-Hughes oil field services business (as suggested by a CNBC article).

What possibly exacerbated the company's stock price decline  was the alarming prediction made by JP Morgan Chase analyst C. Stephen Tusa, Jr. (published on Friday) that GE's stock will plummet another -33% to touch $6 by the end of 2019 owing to its mounting debt. GE CEO Culp’s statements on Monday was followed by the stock actually dropping below $8 at one point - for the first time since March 2009.

Tusa, Jr. had also mentioned that GE Capital is nearing a "tipping point" as it is saddled with leverage. Culp told CNBC that the conglomerate would be shrinking its banking arm, while also mentioning that the latter has assets matching liabilities.

Following last month’s credit rating downgrades from both Moody's Investors Services and S&P Global Ratings, GE felt pressured to retract from selling commercial paper (a short-term borrowing vehicle that is relatively less costly) and instead turn to banks for borrowing funds (which is relatively expensive).

As for GE Power, Culp indicated that the company is working hard to turn things around for that segment, as suggested by the CNBC article.

Culp hailed GE Aviation as “crown jewel” as it remains in good shape, even as the several other  businesses and financials of the parent conglomerate are in deep waters at present.