Thursday June 25, 06:33 PM
Judge allows GM financing, bankruptcy on track
NEW YORK (AFP) - A bankruptcy judge Thursday authorized General Motors (NYSE: GM - news) to tap into the second half of 30 billion dollars in government financing, keeping the rapid restructuring plan on track.
Judge Robert Gerber allowed the struggling US automaker to access an additional 15 billion dollars, after having permitted GM the first 15 billion dollars on June 1 after its bankruptcy filing.
The funds, from the US and Canadian governments, will allow GM to pay its employees and suppliers and other expenses as it seeks a quick exit from court supervision similar to the path taken by rival Chrysler (Xetra: 710000 - news) .
The exit plan, which is set for a hearing June 30, would create a "new GM" that would buy the main assets of the biggest US auto manufacturer.
Under the plan, the US government would own 60.8 percent of the capital for its contribution and Canada would have 11.7 percent.
A United Auto Workers trust fund would hold 17.5 percent.
Creditors holding GM bonds would swap 27.1 billion dollars in debt for a 10 percent stake and warrants allowing them to buy an additional 15 percent stake, officials said.
Sources familiar with the case said that GM appeared to be on track for an exit from bankruptcy protection under the new scheme by mid-July.
The GM filing came after a judge approved the sale of distressed US automaker Chrysler to a group led by Fiat (Milan: F.MI - news) , saying this was the only way to save the company and paving the path for its emergence from bankruptcy.
Chrysler and Fiat finalized a global strategic alliance June 10, forming a new Chrysler Group.
Officials said that President Barack Obama's administration has no intention of nationalizing General Motors over the long term and will not be participating in its day-to-day operations.
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
