White House: GM Bond Exchange An 'Important Step'
27 April 2009 - 3:36PM
Dow Jones News
General Motors Corp.'s (GM) offer to exchange $27 billion in
unsecured notes is "an important step" in the ailing auto maker's
attempt to restructure, President Barack Obama's auto industry task
force said Monday.
In a statement released by the White House, the task force said
it hasn't made a final decision with respect to the government's
current loan to GM or any potential future investments.
Earlier Monday, GM outlined the exchange offer plan, in which it
would swap 225 common shares for each $1,000 principal amount of
outstanding notes. The exchange will commence only if 90% of
bondholders agree to the terms. Under the plan, if GM fails to get
adequate participation, it will file for bankruptcy protection.
The auto maker, which also unveiled plans to cut 21,000 hourly
jobs and eliminate its Pontiac brand by the end of next year, has
an administration-imposed June 1 deadline to finalize its
restructuring.
"The interim plan that GM laid out in (Monday's) filing reflects
the work GM has done since March 30 to chart a new path to
financial viability," the auto task force said. "We will continue
to work with GM's management as it refines and finalizes this plan
and with all of GM's stakeholders to help GM restructure consistent
with the president's commitment to a strong, vibrant American auto
industry."
-By Henry J. Pulizzi, Dow Jones Newswires; 202-862-9256; henry.pulizzi@dowjones.com