General Motors increases its debt-for-equity offer
28 May 2009

General Motors has improved its debt-for-equity offer to its creditors in a move designed to help the US maker work through bankruptcy proceedings more rapidly.

GM is expected to file for bankruptcy protection on Monday 1 June.

The proposed plan offers GM’s creditors 10 per cent of a restructured GM, plus an option to purchase a further 15 per cent of company stock.

“Implementation of this proposal would result in a New GM with a healthy balance sheet, putting the new company on a clear path toward long-term viability and success,” said GM in a statement.

The GM debtors responded by issuing a statement saying: “The allocation of 10 per cent of common equity in the new GM, plus the opportunity to participate in the upside of the company through warrants to purchase 15 per cent of the fully diluted equity in the new GM, gives the bondholders the opportunity to recover a greater portion of their original investment than was previously offered.”

GM’s creditors have until Saturday to commit to the proposed new debt-for-equity offer.

Matt Rigby

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