Sun, May 31, 2009
Business > Industries > US auto industry's downfall

U.S. gov't to own 72.5% of GM

2009-05-29 09:21:55 GMT2009-05-29 17:21:55 (Beijing Time)  SINA.com

A General Motors dealership is seen in Vienna, Virginia, May 27, 2009. General Motors Corp moved closer to filing the largest U.S. industrial bankruptcy after a crucial bond exchange proposal failed and as officials in Germany neared a decision on which company would take over GM's European brand, Opel.(Agencies)

BEIJING, May 29 (Xinhuanet) -- U.S. taxpayers soon may own 72.5 percent of General Motors stocks after GM reached an amended debt-for-equity deal with bondholders on Thursday.

The U.S. Treasury, which already has loaned GM 19.4 billion U.S. dollars, would get 72.5 percent of the new company's stock and provide 30 billion dollars in additional financing to keep the new GM operating under bankruptcy protection. Canada's government is expected to provide an additional Nine billion dollars, a senior Obama administration official said.

A United Auto Workers trust, which will take over retiree health care expenses, will get 17.5 percent.

According to the new proposal, GM bondholders will start with 10 percent common equity of the "new" GM, with 7.5 percent more when GM's market cap reaches 15 billion U.S. dollars and another 7.5 percent more when it reaches 30 billion dollars.

(Agencies)

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