Wednesday May 27, 01:37 PM
Debt swap with GM bondholders fails
WASHINGTON (AFP) - General Motors (NYSE: GM - news) said Wednesday it failed to win sufficient support from its bondholders for a deal to swap debt for equity, making a bankruptcy filing more likely for the troubled auto giant.
When exchange offers expired late Tuesday "the principal amount of notes tendered was substantially less than the amount required by GM," the automaker said in a statement.
GM had sought to exchange 27.2 billion dollars of its notes for shares in the automaker to meet conditions in agreements with the US Treasury and its own "viability" plan.
"Since these conditions, as well as certain other conditions, have not been satisfied, the exchange offers will not be consummated," GM said.
GM was widely expected to file for bankruptcy protection ahead of a June 1 deadline imposed by the administration of President Barack Obama, which has providing the automaker with billions of dollars in emergency loans.
The debt exchange was among several moves by GM to shore up its finances and avert bankruptcy.
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