Troubled US automaker General Motors (GM) is set to renegotiate a less advantageous deal with bondholders to restructure its debt, but a bankruptcy declaration remains more likely, US media reported yesterday.
“GM’s restructuring could play out in one of two ways. It could successfully negotiate cost-cutting concessions with unions and bondholders so it can become viable outside of bankruptcy. Or, in the more likely scenario, it will reorganize by filing for Chapter 11” bankruptcy, the Wall Street Journal reported, citing unnamed people familiar with the situation.
The Treasury Department is pressuring GM to offer its bondholders “a small portion” of company shares, the Journal said, adding that the new deal marked “a sharp cut” from a bond-exchange offer by GM two weeks ago.
PHOTO: REUTERS
The earlier deal had provided about US$8.5 billion in cash and new debt in GM, on top of 90 percent of company stock.
The Treasury “believed the earlier plan was too generous to bondholders,” the Journal said, citing people familiar with the matter.
GM has already received US$13.4 billion from the federal government to help shore up the company.
The new offer could be presented “as soon as next week,” the newspaper said, warning that is “sure to face strong resistance from bondholders.”
The plan would also split the company into a “New GM” that would have the company’s more promising brands, such as Chevrolet and Cadillac, and an “Old GM” with brands facing trouble.
GM has until late June to give the government a restructuring plan, on which additional federal aid would hinge.
Meanwhile, more than three-quarters of Americans think the government should let ailing automakers GM or Chrysler go bankrupt instead of bailing out the firms, a poll released on Thursday showed.
Seventy-six percent of Americans think the federal government should let the auto companies go bankrupt, the survey conducted by CNN and the Opinion Research Corporation showed.
The government has pumped billions of dollars into GM and Chrysler in recent months in a bid to keep the auto giants afloat. US President Barack Obama has warned, however, that the two firms could still face bankruptcy if they do not come up with viable plans to return to profitability.
Since the auto crisis became headline news late last year, the poll found the number of Americans who think the US economy would face a major crisis if the auto firms go bankrupt has declined.
In December 66 percent of those surveyed said they thought the companies were too big to let fail, compared to 47 percent now. A majority — 55 percent — said they thought they wouldn’t face any problems at all in their own lives if the automakers went bust.
Only 37 percent of Americans said they would purchase a car from a bankrupt company, although the figure jumped to 57 percent if the government were to promise to stand behind the cars’ warranty.
The survey, conducted between Thursday and Sunday, interviewed 1,023 Americans by telephone and has a margin of error of plus or minus 3 percentage points.
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College
RSS