GE raises $1.5B as pressure mounts to fix balance sheet

General Electric boss Larry Culp is making good on his promise to swiftly unload assets to pay down the company’s mountain of debt.

In the second major deal this week, GE (GE) said on Friday it’s raising $1.5 billion by selling a GE Capital portfolio of healthcare equipment leases and loans to TIAA Bank.

The transaction, combined with a plan announced on Tuesday to sell a $4 billion stake in oil-and-gas giant Baker Hughes (BHGE), underscores GE’s scramble to raise cash that can be used to repair the balance sheet. Last month Culp also slashed GE’s cherished dividend to a penny.

Years of poorly-timed deals and shrinking cash flow have sparked a cash crunch at GE, which makes everything from light bulbs and jet engines to MRI machines and wind turbines. GE’s stock price has been cut in half this year, on track for its worst performance since 2008.

Culp, who became CEO on October 1, vowed to move with a “sense of urgency” to repair GE’s finances. “This is the challenge of a lifetime given where we find the company today,” Culp told CNBC.

Prior to 2008, GE Capital was a major growth engine at the company. It provided affordable financing that allowed customers go out and purchase GE’s industrial products. But GE Capital came under enormous pressure during the financial crisis, nearly taking down the entire company. And its problems are still haunting GE.

GE Capital’s long-term care insurance business took a $6 billion charge earlier this year. And the company faces a potentially-costly settlement with the Justice Department over WMC, the subprime mortgage lender acquired in 2004.

Jeff Immelt, the widely-criticized former CEO of GE, said on Thursday he wishes he’d been able to get rid of GE Capital more quickly.

“Believe me, it wasn’t for a lack of trying,” Immelt said from the World Business Forum in New York. “It was just hard to do.”

Now under Culp, GE Capital is unloading this $1.5 billion healthcare portfolio of loans and leases that financed purchases of medical equipment by 1,100 hospitals and 3,600 physician practices and medical centers across the United States. The equipment includes everything from ultrasound and respiratory machines to surgical and lab materials.

As part of the deal, GE and TIAA Bank entered into a five-year vendor financing agreement for GE Healthcare’s US customers. GE said that the leadership and sales force of the healthcare equipment finance team will integrated into GE Healthcare in 2019. GE plans to spin off the profitable health care division in a bid to raise more cash.

Jacksonville, Florida, based TIAA Bank is part of TIAA, the retirement giant that was founded by steel magnate Andrew Carnegie in 1918. Today, TIAA manages around $1 trillion of assets.