A deadline for General Motors Corp. bondholders to accept a revised debt-for-stock offer that could speed the carmaker's ride through Chapter 11 passed Saturday without any word on whether there was enough participation to satisfy the company and the Obama administration.
The offer would give holders of about $27 billion in bonds as much as 25 percent of a new, post-bankruptcy GM while wiping out most of the bond debt.
The company and the administration hoped to get enough bondholders to agree so that the deal could be part of GM's expected bankruptcy filing Monday.
A senior administration official, speaking on condition of anonymity because of the sensitive negotiations, said Thursday that a "judgment call" would be made as to whether the percentage of bondholders agreeing to the deal was acceptable. GM and Treasury Department officials had no comment after the offer expired at 5 p.m. Saturday.
The last-minute maneuvering came as GM's board of directors reportedly met for a second straight day in Detroit on Saturday and Chief Executive Officer Fritz Henderson prepared for a news conference Monday in New York, where the company is expected to file for bankruptcy protection in one of the largest Chapter 11 cases in U.S. corporate history.
The company made its latest proposal Thursday, a day after an earlier offer to bondholders expired with little support. That proposal, made by GM in April, would have given bondholders a total of 10 percent equity in a new GM in exchange for forgiving $24 billion, or 90 percent, of the bond debt.
The Obama administration wanted to try to strike a deal with bondholders before GM entered Chapter 11 to allow the process to move more quickly and smoothly by giving the bankruptcy judge fewer contentious issues to handle in court.
After consultation with Treasury Department officials, GM made the more generous offer to bondholders Thursday. The proposal would give the bondholders a 10 percent stake in a restructured GM with warrants to buy an additional 15 percent as GM recovered.
A group representing about 20 percent of the bondholders accepted the latest offer, saying it was unwilling to risk trying for a better deal in bankruptcy court.
The group said one factor in accepting the deal was the Treasury Department's decision to give GM about $30 billion in additional money to get through bankruptcy and convert most of the approximately $50 billion it has lent the automaker into equity, "vastly improving the balance sheet of the company and substantially increasing its equity value."
