May 31 (Bloomberg) -- A majority of General Motors bondholders agreed to support a plan to exchange their debt for an ownership stake in the company as high as 25 percent, the New York Times reported, citing people familiar with the matter.
Investors holding a little more than 50 percent of GM’s $27.2 billion of debt agreed to the swap, removing the last roadblock for General Motors to file for bankruptcy protection tomorrow, the paper said.
Bondholders will initially get a 10 percent stake in the company, with warrants for an additional 15 percent, the paper said. GM scheduled a news conference tomorrow in New York, where it’s expected to make its bankruptcy filing, the Times reported.
General Motors stock fell to 75 cents on May 29, below the $1 minimum normally needed to trade on the New York Stock Exchange, and the lowest level in 76 years.
A restructured General Motors will be controlled by the U.S. government, with the Canadian government possibly owning a small share. A union health-care trust will own 17.5 percent and 10 percent will be given to the old GM to hand to creditors to resolve claims, according to a regulatory filing made May 28.
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