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GM needed the support of 90 per cent of the bondholders to swing the deal – which would have given them 10 per cent of the auto giant — but reports overnight suggested acceptance was in the ‘single digit’ region.
The failure was a serious setback for the carmaker, after United Automobile Workers union leaders recommended their members agree to a deal that would slash GM’s debt to a retiree health care trust fund.
Under that arrangement, GM would have given the UAW 17.5 per cent equity in a restructured company, later rising to 20 per cent if the share price improved, with the addition of another US$6.5 billion worth of preferred stock and a US$2.5 billion note.
It is expected that GM will make a move before the June 1 deadline for restructuring.
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