GM closer to bankruptcy

27/05/09 20:49 CET

corporate

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General Motors is heading down the road to bankruptcy protection from its creditors.

That is because the struggling car maker’s bond holders have refused to accept a plan whereby they would be given shares in a restructured GM in exchange for wiping out their debt. GM owes the bond holders 27 billion dollars (19.4 billion euros) and was offering to swap that for a 10 percent stake in a reorganised company. Institutional investors felt that was not enough. The US government – which has given GM billions in emergency loans – will now end up as the majority shareholder. Washington had set a deadline of 1st June for GM to reach deals with the bondholders as well as get an agreement on concessions from its workers. Filing for bankruptcy protection will give GM more time to reorganise.More about: Car industry, Financial Crisis, USA

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