29 May 2009

Higher offer made to GM bondholders

8:12 pm on 29 May 2009

General Motors and the US Treasury have improved their offer to GM's bondholders, as they prepare for the company's move into bankruptcy protection.

Bondholders with $US27 billion of the company's debt are now being offered an option to buy an extra 15% of GM shares as part of a proposed bankruptcy deal. They were previously offered 10%.

GM says it has already secured the backing of 20% of bondholders for the new offer.

If bondholders back the new offer, it will allow the carmaker to exit bankruptcy protection more quickly.

The company is under a government deadline of 1 June to apply for bankruptcy protection.

The General Motors board is meeting to prepare to file for bankruptcy in New York on Monday.