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GM bondholders appeal to break impasse in talks.

Byline: Reuters(Reuters)

DETROIT: Advisers representing General Motors Corp bondholders on Friday issued an appeal to the automaker and U.S. officials to break an impasse in a crucial round of debt restructuring talks.

GM s $13.4 billion in emergency loans from the U.S. Treasury set a target for the automaker to cut its $27 billion in bond debt to a third of its value by swapping bonds for stock in a recapitalized company.

But a committee representing thousands of GM bondholders has resisted those terms as both unfair and uncertain to succeed in keeping the struggling automaker out of bankruptcy.

"All parties can agree that bankruptcy is not a preferred option for GM," advisers to the GM bondholders said in an unusual statement.

"There has to be some level of shared sacrifice from all of the stakeholders," the statement said. "That s the only way the government is going to get the high level of acceptance from bondholders necessary to achieve an out-of-court exchange."

A committee of GM debt holders including Franklin Templeton Investments, Fidelity Investment and Loomis Sayles & Co have been in talks with the automaker since early this year.

The hedge fund Elliott Management also has been active in brainstorming alternatives for GM bondholders, according to a person familiar with its efforts, who was not authorized to discuss the confidential talks.

GM s talks with bondholders, which have stalled in recent weeks, have played out in parallel to talks between the automaker and its major union, the United Auto Workers.

Bondholders presented GM and the White House task force overseeing the restructuring of the auto industry with a set of proposals earlier this month.

Details of that proposal have not been disclosed, but people with knowledge of the negotiations have said bondholders have proposed swap terms that would include incentives for investors to participate.

Muscat Press and Publishing House SAOC 2009

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Publication:Times of Oman (Muscat, Oman)
Date:Mar 22, 2009
Words:324
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