US government to own 72% of GM

Fallen US auto giant General Motors pulled back from the brink, winning government and bondholder support for a new restructuring plan.

GM, kept afloat so far with USD 19b in taxpayer money, had been facing a deadline on Monday to come up with an agreed reorganization.

The new plan endorsed by bondholders, would see the government hold a 72.5 percent stake in return for possibly more than USD 50b of fresh funding.

The Treasury Department "has indicated to GM that if GM decides to seek relief under the US Bankruptcy Code and seek bankruptcy court approval for the sale of substantially all of its assets ... a new company sponsored by the US Treasury (New GM) would agree to acquire such assets," a GM filing with the Securities and Exchange Commission said.


The government could provide "in excess of USD 50b" for this reorganization that would be converted to stock, it added.


GM's survival was thrown into doubt earlier this week when holders of some USD 27b in GM bonds rejected a plan to swap that debt for 10 percent of the new company.