GM bondholders propose debt-for-stock swap plan

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Source: Marketwatch

A group of General Motors bondholders announced a plan that they say would help GM avoid bankruptcy and save U.S. taxpayers $10 billion in cash. The proposal involves allocating new GM equity equally across the board to union VEBA and GM bondholders, pro rata to the level of financial obligation owed to each by GM. The union VEBA, based on the current $20 billion in health benefits obligations it owes to retirees, would own 41% of the new GM. Bondholders, as a result of their $27 billion of notes outstanding, would own 58% of the new GM. Current shareholders would retain 1% of the equity of the new GM.

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