Warren Buffett sought to capitalise on the woes of global business again yesterday as he announced plans to buy $3 billion of preferred shares in General Electric as part of a $15 billion (£8.4 billion) capital-raising by America’s largest conglomerate.

Mr Buffett, who agreed last week to invest $5 billion in Goldman Sachs after a sharp fall in its share price, will also secure the shares in GE at a relatively low price as the group’s stock has declined by 34 per cent this year.

The shares have been hit by a poor performance from its GE Capital Finance arm, which brings in close to half its revenues, and concerns about the outlook for the broader economy. Mr Buffett said: “GE is the symbol of American business to the world. I am confident that GE will continue to be successful in the years to come.”

His comments came a week after he appeared to position himself for an investment in GE by giving the group his vote of confidence. At that time, Mr Buffett, who always invests in high-profile companies, pointed out that GE has “strong global brands and businesses with which I am quite familiar”.

Although GE had repeatedly said its finance arm was solid, it was forced to change tack last week as it cut its third-quarter and full-year profits guidance.

The group cited “unprecedented weakness and volatility in the financial services markets” for the profits warning and announced a series of moves to bolster its position. These included suspending its share buyback programme and making a forecast that the group would probably not increase its dividend this year, for the first time since the 1970s.

Jeff Immelt, chairman and chief executive of GE, said: “The environment remains volatile. However, the company’s performance remains on track with the earnings guidance we provided last week for 2008.” Mr Buffett, who has more than $35 billion of cash to invest at a time when money is an extremely scarce commodity, has the option of buying $3 billion in the GE rights issue, in addition to his $3 billion investment in newly issued preferred shares.

The fund-raising will help GE to retain its AAA credit ratings, which Mr Immelt said remained a top priority for the group. He assured investors that GE continues to “successfully meet our commercial paper needs”.

Shares in GE, which fell by as much as 8 per cent yesterday, recovered after the announcement to trade down about 65 cents, or 2.6 per cent, at $24.85 in afternoon trade.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive