We all knew this was coming as a result of recent events, but here’s the story on how it’s broken down in the last 24 hours.
From Automotive News:
DETROIT/NEW YORK (Reuters) — General Motors has failed to persuade enough bondholders to accept a debt-for-equity swap, setting the stage for the largest-ever U.S. industrial bankruptcy within days.
The event marks a critical disappointment for GM, once considered the bellwether of U.S. manufacturing….
…..The largest U.S. automaker had so far failed to gain anywhere near the 90 percent of bondholder support desired to stave off bankruptcy, two sources familiar with the discussions told Reuters on Tuesday. Bondholders had until midnight to make their final decision on the tender.
As of midday Tuesday, the source said the company had only a “low-single-digit” percentage interest from bondholders……
…..GM had no comment on the bond exchange. The automaker said it would detail results of the exchange today. Reuters sources said GM could file for bankruptcy some time after midnight Tuesday but before June 1.
The exchange offers expired at 11:59 p.m. EDT on May 26, 2009, at which time the principal amount of notes tendered was substantially less than the amount required by GM to satisfy the debt reduction requirement under its loan agreements with the U.S. Department of the Treasury, to meet the debt reduction objectives under its viability plan, or to meet the minimum tender condition of the exchange offers as required by the U.S. Treasury. Since these conditions, as well as certain other conditions, have not been satisfied, the exchange offers will not be consummated.
Memo to GM – don’t take Saab down with you.
Make your final act where Saab is concerned a good one by choosing a good new owner.
It’s the least you can do after so many years of neglect.