A bankruptcy judge, on June 25, authorized General Motors to tap into the second half of $30 billion in government financing, keeping the rapid restructuring plan on track. Judge Robert Gerber allowed the the company to access an additional $15 billion, after having permitted GM the first $15 billion on June 1 after its bankruptcy filing.
The funds, from the U.S. and Canadian governments, will allow GM to pay its employees and suppliers and other expenses as it seeks a quick exit from court supervision similar to the path taken by rival Chrysler.
The exit plan, which is set for a hearing June 30, would create a "new GM" that would buy the main assets of the biggest US auto manufacturer. Under the plan, the U.S government would own 60.8% of the capital for its contribution and Canada would have 11.7%. A United Auto Workers trust fund would hold 17.5%.
Creditors holding GM bonds would swap $27.1 billion in debt for a 10% stake and warrants allowing them to buy an additional 15% stake, officials said.
Sources familiar with the case said that GM appeared to be on track for an exit from bankruptcy protection under the new scheme by mid-July.
Copyright Agence France-Presse, 2009
