for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up

FACTBOX-GM's possible bankruptcy process

 May 28 (Reuters) - General Motors Corp GM.N and the U.S.
Treasury made an improved equity exchange offer on Thursday to
bondholders with $27 billion in debt, intended to pave the way
for a quick bankruptcy process for the automaker.
 Under the proposed deal, which GM said was supported by
creditors representing about 20 percent of its debt, bondholders
would be offered 10 percent of a reorganized company and given
warrants to purchase another 15 percent.
 In exchange for the improved payout, bondholders would agree
not to oppose a move to sell GM's profitable assets to a new
company funded by the U.S. government in a fast-track bankruptcy
process. The exchange offer will be open to bondholders until 5
p.m EDT (2100 GMT) Saturday, GM said. [ID:nN28324145]
 Following are details of the '363 sale' bankruptcy process
for GM proposed by the U.S. Treasury and its new equity exchange
offer for bondholders:
 FILING
 * GM to file under Chapter 11 and pursue a sale under
Section 363(b) of the U.S. Bankruptcy Code and the automaker
would be split into two companies: Old GM and New GM.
 * GM and its debtor subsidiaries would sell most of their
assets to New GM. The rest of the assets would be held in Old
GM, which will remain in bankruptcy.
 * Following the sale under section 363, the U.S. Treasury
estimates that about $27.2 billion principal amount of notes
would ultimately comprise substantially all of Old GM's debt.
 * Obama administration official estimates that any GM
bankruptcy would take at least 60 to 90 days.
 NEW GM CAPITALIZATION
 * Debt: New GM is estimated to have about $17 billion in
total consolidated debt, excluding debt related to GM's
automotive supplier financing program and warranty program.   
Debt includes $8 billion owed to U.S. Treasury, $2.5 billion of
debt owed to the United Auto Workers union-aligned healthcare
trust -- Voluntary Employee Beneficiary Association (VEBA) --
and $6.5 billion of other debt.
 * Perpetual preferred stock: $9 billion cumulative perpetual
preferred stock with a 9 percent dividend per annum. Of that,
$2.5 billion issued to the U.S. Treasury, $6.5 billion issued to
New VEBA.
 OWNERSHIP
 * The outstanding common equity of New GM would be allocated
as follows after consummation of the 363 Sale:
 -- 72.5 percent to the U.S. Treasury
 -- 17.5 percent to New VEBA
 -- 10 percent to Old GM
 WARRANTS
 * Old GM to receive warrants to acquire newly issued shares
of New GM equal to 7.5 percent of New GM common equity. This is
exercisable at any time prior to the seventh anniversary of
issuance.
 * New VEBA to receive warrants to acquire newly issued
shares of New GM equal to 2.5 percent of New GM common equity.
This is exercisable at any time prior to December 31, 2015.
 DIP FINANCING
 * The U.S. Treasury, together with one or more non-U.S.
governmental entities, will offer debtor-in-possession
financing.
 * Other than the $8 billion of debt owed to the U.S.
Treasury by New GM, all amounts owed to the U.S. Treasury under
existing debt and debtor-in-possession financing in connection
with the 363 Sale would be equitized.
 * The U.S. Treasury has provided $19.4 billion of loans to
GM to keep it afloat since the start of the year.
 UNION:
 *The United Auto Workers will have one director on board of
New GM
 * Union does not expect to exercise warrant for 2.5 percent
stake in New GM
 * Union estimates New GM would have to be valued at $75
billion for union warrants to be exercisable.
 NEW AID
 GM to receive total of $40 billion in new aid, including $9
billion from Canada government.
 (Reporting by Soyoung Kim and Poornima Gupta; Editing by Tim
Dobbyn and Matthew Lewis)


for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up