GM’s bondholders have reached a deal with the ailing car maker, in an about face from their previous recalcitrance.
In a regulatory filing on Thursday, GM said it would give bondholders 10 per cent of the ‘new’ GM, with an option to purchase up to 15 per cent – on condition that they did not oppose the government-sponsored restructuring.
Here’s more from Reuters:
Under the proposed deal, which GM said was supported by creditors representing about 20 percent of its debt, bondholders would be offered 10 percent of a reorganized company and given warrants to purchase another 15 percent.
In exchange for the improved payout, creditors would agree not to oppose a move to sell GM’s profitable assets to a new company funded by the U.S. government in a fast-track bankruptcy process.
The exchange offer will be open to bondholders until 5 p.m. Saturday EDT, GM said.
The U.S. Treasury would own 72.5 percent of the new GM coming out of a bankruptcy sale process, while a trust affiliated with the United Auto Workers union would own 17.5 percent, GM said in a filing with securities regulators.