JOIN USGM bond-holders had until Tuesday to trade $27 billion in debt for a 10 per cent ownership stake in the reorganised company that the US officials have said could emerge from a quick trip through the bankruptcy court.
As the deadline passed early on Wednesday, there was no immediate word from GM on how much debt the offer had succeeded in retiring. The Treasury also had no immediate comment.
The firm’s bond exchange offer had been dogged by criticism since it was launched a month ago that it was an unfairly low payout made at the direction of the US officials more sympathetic to the competing claims of GM’s unionised workers and retirees. GM planned to detail the results of the debt exchange offer on Wednesday, spokeswoman Renee Rashid-Merem said.
The firm’s board could also meet as soon as Wednesday to review options for the automaker that has been kept in operation since the start of the year with $19.4 billion in emergency federal loans, representatives said. The bondholder deal was running well short of the company’s goal and had attracted only a low single-digit percentage of the $27 billion targeted as of Tuesday afternoon.
Bond-holders blamed
Analysts said GM’s bond-holders had tipped the company toward a near-certain bankruptcy.
“I think the exchange offer was really a transparent attempt to blame bond-holders for the bankruptcy rather than to accept responsibility for years of mismanagement and failure to anticipate things that should have been understood,” said an analyst. “I think the task force made that hurdle so high, they wanted them to go into bankruptcy, they see that as the solution,” another analyst said.
US seeks to be inactive in GM
The US government wants to be an inactive a shareholder in General Motors as possible if it ends up taking an ownership stake during a reorganisation of the automaker, sources said on Tuesday.
“We are reluctant, somewhat involuntary shareholders in this situation,” one of the sources said.