Bondholders agree to General Motors deal

Posted: May 31, 2009 in News

General Motors’ bondholders have agreed to a company plan to swap their debt for an ownership stake as high as 25 percent, sources in Detroit said.

Bondholders controlling just more than half of the company’s $27.2 million in bond debt agreed to the deal , sources close to the negotiations told The New York Times.

The deal allows the ailing automaker to file for bankruptcy protection and have a more orderly restructuring, The Times reported.

Under the plan, the United Automobile Workers union, via its retiree healthcare fund, would receive a 17.5 percent stake in a restructured GM and warrants to buy an additional 2.5 percent, sources told The Times. Bondholders initially would receive a 10 percent stake, along with warrants for 15 percent.

The federal government, which has loaned GM nearly $20 billion, could end up owning as much as 70 percent of the company, The Times reported.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s