GM bondholder deadline passes as bankruptcy looms
Monday, 1 June 2009
DETROIT, May 31 (Reuters): General Motors Corp finished a key piece of business Saturday before a bankruptcy filing planned for Monday as the deadline expired for bondholders to accept an exchange offer brokered by the Obama administration.
The development came as GM's board met for a second consecutive day to review developments and finalize plans for what has become the most widely telegraphed and carefully orchestrated bankruptcy in the history of American business.
GM would not comment on how many investors had expressed support for its bondholder swap that would give them up to 25 per cent ownership of a reorganized company in exchange for $27 billion in bond debt.
GM bondholders had until 5 p.m. EDT to register their support for the deal. A group representing about a dozen major GM bondholders also had no comment.
A bankruptcy filing by GM would rank as the third-largest bankruptcy in U.S. history and the largest and most complex manufacturing bankruptcy ever.
GM has been losing market share since the early 1980s when it commanded 45 per cent of the U.S. market. It has been hurt by its reliance on a truck-dominated vehicle line-up and by a deep plunge in demand as credit tightened in 2008.
Since last week, GM has been racing to complete a series of last-minute deals intended to help speed its way through a fast-track bankruptcy that would see it emerge under the majority ownership of the U.S. government.
Those deals have included a new contract for the United Auto Workers union and an agreement to spare GM's Opel brand from collapse in a deal brokered by the German government.
Bondholders have been one of the last pieces to fall into GM's complicated bankruptcy puzzle under the direction of the autos task force appointed by the White House and headed by former investment banker Steve Rattner.
The development came as GM's board met for a second consecutive day to review developments and finalize plans for what has become the most widely telegraphed and carefully orchestrated bankruptcy in the history of American business.
GM would not comment on how many investors had expressed support for its bondholder swap that would give them up to 25 per cent ownership of a reorganized company in exchange for $27 billion in bond debt.
GM bondholders had until 5 p.m. EDT to register their support for the deal. A group representing about a dozen major GM bondholders also had no comment.
A bankruptcy filing by GM would rank as the third-largest bankruptcy in U.S. history and the largest and most complex manufacturing bankruptcy ever.
GM has been losing market share since the early 1980s when it commanded 45 per cent of the U.S. market. It has been hurt by its reliance on a truck-dominated vehicle line-up and by a deep plunge in demand as credit tightened in 2008.
Since last week, GM has been racing to complete a series of last-minute deals intended to help speed its way through a fast-track bankruptcy that would see it emerge under the majority ownership of the U.S. government.
Those deals have included a new contract for the United Auto Workers union and an agreement to spare GM's Opel brand from collapse in a deal brokered by the German government.
Bondholders have been one of the last pieces to fall into GM's complicated bankruptcy puzzle under the direction of the autos task force appointed by the White House and headed by former investment banker Steve Rattner.