G.M. Bankruptcy Plan Eyes Quick Sale to U.S. Gov’t
20 May 09 | Reuters
General Motors Corp’s (G.M.) plan for a bankruptcy filing involves a quick sale of the company’s healthy assets to a new company initially owned by the U.S. government, a source familiar with the situation said on Tuesday.
The source, who would not be named because he was not cleared to speak with the media, did not specify a purchase price. The new company is expected to honor the claims of secured lenders, possibly in full, according to the source.
The remaining assets of G.M. would stay in bankruptcy protection to satisfy other outstanding claims.
G.M. has about $6 billion in secured debt, including a secured revolving credit and bank debt.
The government’s plans include giving stakes in the new company to G.M.’s union and bondholders, although the ownership structure of the company is still being negotiated, said the source who is familiar with the company’s plans.
In addition, the government would extend a credit line to the new company and forgive the bulk of the $15.4 billion in emergency loans that the U.S. has already provided to G.M., the source said. >>>
(h/t: The Raw Story)