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Bankruptcy imminent, 54 pct. of GM bondholders back Treasury plan

AFP [1]
Monday, June 1, 2009

Creditors holding about 54 percent of General’s Motors bonds have approved a restructuring plan proposed by the US Treasury, a spokesman for the bondholders said Sunday.

The 54 percent represented 975 institutions, a spokesman for the ad hoc committee of bondholders, Elliot Sloane told AFP.

The Treasury had given the bondholders until the end of the day Saturday to respond to its proposal to create a new company and shed assets that were causing losses.

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[2]

The creditors collectively would receive 10 percent of GM’s stock in return for their shares, and warrants, or options to buy stock, allowing them to acquire up to an additional 15 percent of the company’s stock.

If the options are exercised, they would control up to 25 percent of the “new GM,” while the Treasury would at least initially hold a 72.5 percent stake in the company that emerges from a bankruptcy court reorganization.

Full article here [1]