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GM Advisers Present 'Best Chance' Plan For Restructuring

GM chairman Richard Wagoner 2008

GM chairman Richard Wagoner 2008

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GM bondholder advisers claim they've presented a plan to both GM and Obama's autos task force that "provides GM's best chance for an out-of-court restructuring." They released a statement claiming that the plan, which would trade bondholders' stake in GM's spiraling debt for equity in the restructured entity, is "consistent with the government's restructuring requirements under the terms"set forth by the emergency loans granted to the automaker.

Their plan claims to be the best chance of finding an agreeable middle ground for a diverse group of bondholders that includes mutual funds, pension funds, and retail bondholders. Advisers note that their plan is but one of several being considered for out-of-court restructuring.

The bondholders have been asked to reduce by 2/3s their $27 billion stake in GM in exchange for "new equity in a recapitalized company," according to Automotive News. Bondholders have claimed, given GM's remaining debt and deals being brokered with UAW autoworkers, that they're getting the short end of the deal. But with March 31 looming, the date when the autos task force will decide whether GM and Chrysler are even worth restructuring, this deal might well be their best-case scenario.

[source: Automotive News]

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Comments (3)
  1. "GM"

    The only way for GM to get out of this mess is 1 somehow dump the useless UAW. And you can give GM all the money in the world but if nobody is buying cars that how is anyone going to stay in busniness?

  2. "GM"

    The only way to save Gm is to stop these trade agreements or to make them fair.

  3. "GM"

    The banks on the take for government funds MUST start lending. No bonuses, no acquisitions of other weaker banks. Those funds are to be used,now, for lending, period. How Congress can sleep at night letting AIG and the banks leave Washington with check in hand and no strings attached while they rake Detroit over the coals is incredible. Talk about double-standards...

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