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GM readies all-equity offer for debt
GM readies all-equity offer for debt
Posted Monday, Apr 20, 2009, 11:33 am in Employee News
The Obama administration has directed General Motors to prepare a new restructuring plan that would pay off bondholders and the automaker’s major union in stock in exchange for $48 billion in debt, people briefed on the plan told Reuters.
The U.S. Treasury, which has provided $13.4 billion in emergency funding to keep GM operating since the start of the year, has indicated that it could also convert those taxpayer-backed loans into GM stock, the sources told Reuters. GM, which is working to complete a restructuring that could include a bankruptcy filing, plans to make the new proposals to bondholders and the UAW within the next two weeks, sources told the news service.
According to Reuters, the proposals emerged after two weeks of intense talks between the autos task force, headed by former investment banker Steve Rattner, and GM executives in Detroit. The stock-based payout to GM’s major union and its bondholders would represent much deeper concessions for both groups than the terms they had been offered under the GM bailout loans approved by the Bush administration, the story said. (Reuters/Automotive News)
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Rick
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