|
Investment in Stocks - Forum for sharing info about stocks and options.
|
|
|
|
|
Posted by Igor The Terrible on May 28, 2009, 5:51 pm
Good grief!!! What a joke, By the time all this bullshit is done and
over with, any ideas on where GM will end up...besides chapter 7 and
out in the gutter. A perfect example of throwing good money after
bad. ...And when all is said and done, guess who is ultimately going
to foot the bill?
All the bailouts and "restructuring" will amount to nothing. GM's
fate is sealed. This is a structural problem with our socioeconomic
system--and it will not go away by throwing money at it. So stand by
and watch your tax dollars go up in smoke as the idiots in washington
squanders them by the transoceanic freighterload!
NOW does everyone see WHY I was vehemently against bailouts from the
get go?
GM says bondholder panel supports sweetened offer
DETROIT =96 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
company 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 GM with a much smaller
debt load and the U.S. government as the dominant shareholder.
A person familiar with GM's plans said it was "probable" that the
company would file for bankruptcy protection on Monday. The person
didn't want to be identified because the plans were still under
discussion with the U.S. and Canadian governments.
The government proposal is similar to the approach taken in the
bankruptcy reorganization approach used by Chrysler LLC. Its plan to
shed assets and sell control of a downsized carmaker to Fiat, aided by
government financial assistance, could receive final approval from a
bankruptcy court judge in New York before the end of the week.
A senior Obama administration official estimated that GM would be
under bankruptcy protection for 60 to 90 days, which is longer than
Chrysler's reorganization because of the size and complexity of GM.
The official spoke on condition of anonymity because of the sensitive
nature of the ongoing preparations.
The government's goal for GM is to eventually return it to
profitability, allowing it to eventually sell its shares. But the
risks for taxpayers are daunting, with U.S. auto sales near their
lowest level in 27 years.
"We will come out of this rid of some of the historic legacy costs
that have been dragging us down for the last 20 years or so," GM Vice
Chairman Bob Lutz said Thursday at an Automotive Press Association
luncheon in Detroit. "We will come out of it with an all new focus on
product development."
The revised offer to the holders of $27 billion 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 =97 ones with presumably little value at all.
In addition to the 10 percent of the stock in a newly formed GM that
was originally rejected by bondholders, the new offer would give them
warrants to acquire an additional 15 percent stake at a deep discount.
That would come only if they agree to support selling the company's
assets to a new company under bankruptcy court protection.
The Securities and Exchange Commission filing said that if enough
bondholders don't agree to support the sale by 5 p.m. Saturday, the
amount of stock and warrants they get would be substantially reduced
or eliminated. The filing didn't specify how much support is needed.
The government had demanded that 90 percent of GM's bondholders agree
to a previous debt-for-equity swap that failed. The Obama
administration official said the government would not require a
specific percentage of bondholders to approve the new proposal but
would make a judgment call based on the level of support.
About 15 percent of bondholders had agreed to the previous proposal,
the official said. Combined with the approval of a bondholders
committee and other large debtholders that collectively hold about 20
percent of GM's unsecured debt, the government now expects at least 35
percent support, the official said.
The committee said it would go along with the new deal, but it was
still unfair.
"While the committee continues to remain troubled by preferential
treatment that the UAW VEBA is receiving compared to the bondholder
class =97 rejecting this offer in the expectation that the bondholders
will do better in a litigated outcome was a risk the committee is
unwilling to take," the committee said in a statement.
A coalition of retail bondholders, meanwhile, continued to oppose the
offer. The group said the new offer remained unfair to retirees who
depend on GM bonds for income and was overly favorable to the UAW.
"From the beginning there's been a lack of transparency in this entire
restructuring process," said Jim Martin, president of the retiree
group 60 Plus Association, in a statement. "No one seems to have the
best interests of small bondholders at heart."
United Auto Workers President Ron Gettelfinger, in a telephone
interview with The Associated Press Thursday, said he didn't want to
get into a debate with bondholders while the union is pushing for
ratification of concessions to GM.
"An objective person that stood back and looked at all the sacrifices
that have been made by active workers and retirees would see that we
have made tremendous sacrifice," he said. The union's role, he said,
was to get the best deal it could for active members and retirees.
Under the proposal, GM would enter bankruptcy protection and its good
assets would be separated from bad ones.
The U.S. Treasury, which already has lent GM $19.4 billion, would get
72.5 percent of the new company's shares and provide $30 billion in
additional financing needed to keep the new GM operating while its
reorganization plan is reviewed by a bankruptcy court judge and the
old GM is liquidated. The Canadian government was expected to provide
an additional $9 billion, the Obama administration official said.
A United Auto Workers' retiree health care trust fund will get 17.5
percent and the old GM, effectively owned by the unsecured
bondholders, would get a 10 percent stake.
The plan envisions the slimmed-down new GM, shorn of more plants and
brands, would have $17 billion in long-term debt and $9 billion in
debt-like preferred shares. That would represent a 61 percent decline
from its existing debt load of about $67 billion.
Only $8 billion of the existing U.S. government loans would remain on
the books; the remainder would be converted into equity and preferred
shares of the new GM.
The deal would wipe out GM's $27 billion in unsecured bond debt,
converting to equity a total of $50 billion in company debt.
GM's filing said that if the deal goes through, the new GM would
emerge with a total of $17 billion in debt =97 $8 billion owed to the
U.S. government, $2.5 billion to the UAW trust and $6.5 billion in
mainly overseas and capital lease debt.
The Obama administration official said the holders of GM's $6 billion
in secured debt would be "protected" but declined to elaborate.
Trading of GM shares was halted for a short time Thursday morning, but
resumed to fall 2 cents to $1.12 in afternoon trading.
___
Associated Press Writer Ken Thomas in Washington contributed to this
report.
|
| Similar Threads | Posted | | Microsoft Withdraws Yahoo Offer After Sweetened Bid Is Rejected | May 3, 2008, 9:49 pm |
| Bush supports hybrids, flex-fuel cars - spokesman WASHINGTON, Nov 10 (Reuters) - President George W. Bush will tell Detroit auto executives next week that he supports efforts to build more hybrids and vehicles that run on alternative fuels, the White Hou | November 13, 2006, 2:52 pm |
| Solar Panel stocks | July 26, 2008, 3:50 pm |
| DSTI Solar Panel / Alt Energy | April 25, 2005, 11:34 pm |
| Solar Panel Stocks DSTI and XSNX | October 25, 2005, 3:30 am |
| Pension funds must go to Nifty-50 stocks: Panel | February 24, 2009, 3:13 am |
| Hiring underway at Midland solar panel plant | June 16, 2009, 1:47 pm |
| Evergreen Solar Panel score highest in performance tests. | March 5, 2009, 9:05 pm |
| Obambi supports mosque at ground zero | August 14, 2010, 12:51 pm |
| Why America has Farm Price Supports (among other things) | May 21, 2006, 11:13 am |
|
|
|
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap