The "New GM" is expected to emerge from bankruptcy in 60 to 90 days with 60.8% owned by the U.S. governmentEnlarge Photo
This is in addition to the $19.4 billion already loaned to GM by the government since the start of the year, yet the struggling carmaker predicts the total amount loaned to increased to $27 billion after the June 1 restructuring deadline.
On top of that, GM has also reached tentative agreements with unions in Canada and the U.S., which will see hourly wage rates reduced and retiree healthcare trust funds paid with stock rather than cash.
Despite the billions in loans and union concessions, GM is still expected to enter bankruptcy. One major sticking point, however, is the money owed to bondholders. According to Automotive News, GM said it will be forced into bankruptcy if it fails to get bondholders to agree to forgive some $24 billion in debts - roughly 90% of the money they are owed.
President Obama’s administration had offered bondholders a 10% stake in a restructured GM but this was rejected. A spokesman for a committee representing GM bondholders said institutional investors solidly oppose that offer as insufficient.