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GM reaches debt-for-equity agreement with bondholders

(Xinhua)
Updated: 2009-05-29 09:27

NEW YORK -- GM, the US biggest automaker, reached an amended debt-for-equity deal with bondholders on Thursday, CNBC reported.

Full coverage:  Global Auto Industry Woes Related readings:  GM: bondholders accept debt-for-equity offer  Bondholders say no to GM plan  GM faces bankruptcy as bondholder offer fails  US likely taking majority ownership of GM  Fate of GM lies with recalcitrant bondholders

According to the new proposal, GM bondholders will start with 10 percent common equity of the "new" GM, with 7.5 percent more when GM's market cap reaches 15 billion US dollars and another 7.5 percent more when it reaches 30 billion dollars.

GM said it will result in a new GM with a healthy balance sheet. However, it might still not spare the company from bankruptcy.