GM announced today that it fell short of the 90% bondholder participation in the proposed debt exchange needed to stay out of bankruptcy. Essentially, far fewer than 90% of bondholders felt like trading in $27 billion in debt for a small amount of stock was a wise investment. This leaves the General with few options other than a bankruptcy filing, which sources say should occur in the next few days as the company gets its ducks in a row.
In other GM-related depressing news, the company has consolidated its European holdings under Adam Opel GmbH in order to more easily package it for sale to either Fiat or Magna International. Magna is the leading contender according to several German government sources, although Magna’s bid will leave their Russian partner Sberbank in control of part of the new company. Sberbank has an interest in Russian automaker GAZ, so we could be seeing Opels sold in Russia under domestic nameplates if the deal goes through.
Exciting stuff, eh?