General Motors Co. suspended its dividend and the share-buyback program activist investors fought for over the last half decade as the largest U.S. automaker seeks to preserve cash in the midst of the pandemic shutting down much of the global car industry.

The measures were a condition for GM to amend a credit agreement with banks so that its $3.6 billion revolver now matures in April 2022, extending it by a year. The moves announced Monday follow other cash-preservation measures taken at the beginning of this month, when the company deferred 20% of salaried workers’ pay, cut top executives’ compensation and put 6,500 employees on leave.

Chief Executive Officer Mary Barra first announced a major buyback in 2015 after fending off an activist campaign by a former Treasury Department official who was representing several hedge funds. She expanded the program to as much as $14 billion two years later in the midst of another battle with billionaire hedge fund manager David Einhorn.

Agreement Terms
Barra, 58, now has to shift focus from pleasing investors to preserving cash after closing down most of GM’s plants last month. Ford Motor Co. has already suspended its dividend.

It may take some time for GM to refocus on returning cash to shareholders. As part of its agreement to extend its revolving credit facility, the carmaker is restricted from buying back stock so long as there is an outstanding balance. GM also can’t pay a dividend if borrowings under its various facilities exceed $5 billion.

GM shares fell as much as 3.7% shortly after the open of regular trading. The stock is now down about 41% this year.

While the dividend and share repurchase suspension was expected, GM now “has ample liquidity to get through worst of disruption,” Dan Levy, a Credit Suisse analyst with the equivalent of a buy rating on the shares.

GM, Ford and Fiat Chrysler Automobiles NV have all been working toward restarting production in early May, but it’s unclear whether state and local governments will lift their stay-home orders to allow them to do so. The United Auto Workers union also has said it opposes the companies reopening so soon.

This article was provided by Bloomberg News.