GM advisers, Obama’s auto team to meet

GM advisers, Obama’s auto team to meet

BY TIM HIGGINS • FREE PRESS BUSINESS WRITER • March 4, 2009

 

Advisers to General Motors Corp.’s bondholders committee, which has been negotiating with the automaker, are expected to meet Thursday with the Obama administration’s auto task force about ways to restructure the company’s unsecured debt, the Free Press has learned.

 

GM must try to get the bondholders to accept a two-thirds debt reduction as part of the $13.4-billion federal loan keeping the company afloat.

The bondholders group is expected to discuss several avenues for reducing the debt on Thursday, including an idea that would have the government guarantee new GM bonds, according to a person familiar with the effort. He did not want to be named because the negotiations are private.

Analysts, such as Eric Selle of J.P. Morgan Securities, have suggested that the government could fund 10 cents of a bond exchange in cash and guarantee 40 cents in new notes.

GM faces a March 31 deadline to get a deal with bondholders and the UAW, which is being asked to accept GM stock for half of the money it is owed for retiree health care costs.

 

Bondholders have questioned whether they were getting a fair deal compared with what the UAW is being offered

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