General Motors Corp. said Thursday a committee of bondholders has agreed to a sweetened deal proposed by the U.S. government to erase the automaker’s unsecured debt in exchange for stock.
The news came in a regulatory filing that spells out the Obama administration’s game plan for what it hopes will be a speedy Chapter 11 bankruptcy reorganization that will leave the U.S. government with 72.5 per cent of the new company’s shares. A person familiar with GM’s plans said it was “probable” it would file for bankruptcy protection Monday.
In the filing, GM says the Canadian and Ontario governments will get shares in the new company in exchange for debt financing.
The revised offer to the holders of $27 billion US in unsecured GM bonds amounted to a take-it-or-leave-it ultimatum: Go along with what the government auto task force’s proposal or be left holding the assets a new GM doesn’t want — ones with presumably little value at all.