U.S. Taxpayers: GM's Accidental Majority ShareholderBy Michelle Krebs May 26, 2009
The U.S. government -- or rather U.S. taxpayers -- will hold a majority share in the new General Motors after it emerges from Chapter 11 bankruptcy, which it is expected to file at any moment.
The U.S. Treasury Department will receive about 70 percent of the new GM in exchange for $50 billion in financing for its restructuring, unnamed sources told The New York Times.
The United Auto Workers union will hold 17.5 percent of the new GM's stock through its retiree health care fund, less than half of what the UAW was supposed to get under previous plans.
Bondholders, who reportedly rejected GM's debt-to-equity offer, will receive about a 10 percent share. Others will receive a smaller amount, the sources told the New York paper.
GM has received $19.4 billion in financing from the Treasury Department and would receive another $50 billion or slightly more in debtor-in-possession financing, which it could draw upon during its court-supervised reorganization, the Times reported.
The $50 billion figure includes the $7.6 billion that GM told the Treasury last week it will need to operate after June 1.
That is the deadline for a restructuring plan that GM must submit to the Obama administration.