Restructuring deal is last chance saloon for General Motors | Business | guardian.co.uk - 0 views
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The ailing carmaker General Motors has proposed handing a controlling stake of more than 50% to the US government as it struggles to reach a deal with its lenders to avert imminent bankruptcy.The nationalisation, in effect, of the biggest US motor manufacturer would be part of a huge debt-for-equity swap as GM tries to shed $44bn (£30bn) of $62bn in crippling liabilities owed to the government, trade unions and bondholders.
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But the plan was condemned last night as "neither reasonable nor adequate", by bondholders who would get only 10% of the company, forcing them to write off billions of dollars. Existing shareholders would be left with only 1%.
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With its future on a knife-edge, GM delivered a blunt warning that unless its creditors accepted the plan, it would declare bankruptcy and leave the courts to carve up the company. Fritz Henderson, the chief executive, told a press conference at the company's headquarters: "If this cannot be accomplished out of court, we'll go into court and restructure GM under bankruptcy if it's necessary."
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