General Motors' bondholders have refused to accept a debt-for-equity swap, prompting analysts to predict the company will file for Chapter 11 bankruptcy protection imminently.
GM announced today that it had failed to gain anywhere near the 90 per cent of bondholder support required to stave off bankruptcy.
The bondholders were asked to forgive debt in exchange for a 10 per cent stake in a restructured company. GM admitted "substantially less" then the 90 per cent threshold of bondholders had agreed to the deal, with unconfirmed reports suggesting that less than 10 per cent of the bondholders agreed.
The deal is a particular blow as GM has managed to secure a deal with the UAW workers' union.
Under the terms of the deal, GM has restructured payment terms on $20 billion that itstill owes to a trust fund for retiree health care.
The UAW agreed to take 17.5 per cent of common stock in a restructured GM in exchange for chaning the terms of the payment.