Elliott Management Backs Revised GM Offer To Bondholders
29 Mai 2009 - 8:46PM
Dow Jones News
Hedge fund Elliott Management will back a revised settlement for
General Motors Corp. (GM) bondholders amid a broader push to win
backing from large institutions ahead of a Saturday deadline.
The $13 billion distressed debt specialist is not a member of
the ad hoc group of GM debtholders who reversed prior opposition
and pledged their estimated 20% of outstanding notes in favor of a
deal.
The ad hoc committee has been canvassing other large creditors
rather than GM's large retail creditor base, according to a person
familiar with the process.
"Based on all the facts and circumstances Elliott Management has
chosen to support the current GM proposal to bondholders," an
Elliott spokesperson said when contacted about their
intentions.
Elliott also served on the Chrysler Secured Creditors Committee
and voted for the government's plan before that company was put
into bankruptcy.
GM bondholders had rejected an offer of 10% in a "new GM" for
their $27.2 billion in debt. The terms were sweetened with some
warrants Thursday, alongside a stark warning that the return could
be "substantially reduced or eliminated" if they don't accept by
5:00 p.m. EDT on Saturday.
The company had sought backing from 90% of debtholders for its
original exchange, but hasn't defined an acceptance level for
Saturday's deadline.
Winning creditor support is expected to make GM's trip through
the bankruptcy court less contentious. It also won support Friday
for union contract amendments to cut its cost base and improve
flexibility.
-By Sharon Terlep, Dow Jones Newswires; 248-204-5532;
sharon.terlep@dowjones.com