31 May 2009

GM board reviews steps towards Chapter 11

2:09 pm on 31 May 2009

The board of General Motors Corp met on Saturday for a second consecutive day to review developments and finalize its plans for filing for Chapter 11 protection bankruptcy.

The company is under a deadline of Monday set by the Obama administration to do so.

GM has asked investors to support for a bondholder swap that would give them up to 25% ownership of a reorganized company in exchange for $US27 billion in bond debt.

Bondholders had until 5pm EDT (2100 GMT) on Saturday to register their support for the deal.

The US government has put $US19.4 billion in emergency funds into the company since the start of the year and plans to invest over $US40 billion more.

GM has been losing market share since the early 1980s when it commanded 45% of the US market.

The company has lost $US88 billion since 2005. Since 2000, GM has slashed over 100,000 jobs in the United States. Another 21,000 GM factory jobs are scheduled to be cut under a deal approved by the UAW this week.