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General Motors (GM) Bond Deal Fails, Bankruptcy Looming
The next chapter in the history of General Motors Corp. (NYSE: GM) is likely to be about bankruptcy. And that would leave the U.S. and Canadian governments as company’s majority owners.
The largest of the U.S. Big Three automakers yesterday (Wednesday) announced that it failed to persuade the required 90% of its bondholders to swap $27 billion in debt for stock, pushing the venerable GM several steps closer to a bankruptcy filing.
The rejection by bondholders is the latest chapter in the ongoing saga of GM’s desperate attempts to reorganize as it faces a government-imposed Monday (June 1) deadline to restructure or…
29May2009 | Money Morning | 0 comments | ContinuedMarket News: General Motors (GM), Sonia Sotomayor and Consumer Confidence Data
Consumer Confidence Leaps; Hong Kong Injects More Stimulus; Virgin Atlantic Sees Cloudy Skies; South Africa Enters Recession; Experts: Supreme Court Nominee Neutral on Business; Hedge Funds Bet Big on Commodities; GM Gets Labor Concessions in Canada; Russian Firm Takes $200 Million Stake in Facebook
- The Conference Board’s index of consumer confidence jumped to 54.9 in May, up from a revised 40.8 in April. The leap marks the biggest one-month gain since April 2003, and was set in motion by tighter credit and oversupply of homes pushing down prices, Reuters reported.
- Hong Kong’s government will inject another HK$16.8 billion ($2.2 billion) into…
U.S. Automakers Confront Unforgiving, Permanently Smaller Market
General Motors Corp. (NYSE: GM) is closing in quickly on its June 1 deadline to finish overhauling its operations, or opt for Chapter 11 bankruptcy. Because that deadline is actually one week from yesterday (Monday), analysts and investors will be watching GM closely this week.
No matter which path GM chooses – conventional restructuring or bankruptcy – the U.S. Big Three of GM, Ford Motor Co. (NYSE: F) and Chrysler LLC will have to adjust to the U.S. auto market’s post-financial-crisis “new reality.” Automakers will sell only 10 million cars and trucks in the U.S. market this year, the worst in at least 30 decades –…
26May2009 | Money Morning | 0 comments | ContinuedWith Government Deadline Looming, GM and Chrysler Pull $5.5 Billion in TARP Funds
The Obama administration said yesterday (Tuesday) that it will provide General Motors Corp. (GM) and Chrysler LLC an additional $5.5 billion in working capital from the Troubled Asset Relief Program (TARP) as the companies face government deadlines to restructure or lose federal support.
Chrysler will have access to about $500 million through the end of this month as it seeks to reach an alliance with Fiat S.p.A. (ADR: FIATY) before a government-imposed May 1 deadline. GM can draw up to $5 billion in assistance through the end of May as it struggles to restructure outside of bankruptcy court, TARP’s special inspector general said in…
22Apr2009 | Money Morning | 0 comments | ContinuedGlobal Investing News: Bank of America (BAC), China Mobile (CHN), General Motors (GM), UBS AG (UBS), American International Group (AIG) and Eli Lilly & Co. (LLY)
BofA 1Q Profit Doubles; China Mobile Misses Estimates; GM Cutting 1,400 Salary Positions; UBS Selling Brazilian Unit; AIG Gets More Fed Funding; Leading Economic Indicators Fall More Than Forecast; Lilly Beats Estimates; Rubber Prices May Fall on Fading Auto Sales
- First-quarter profit for Bank of America Corp. (BAC) more than doubled, but a surge in troubled loans threw a wet blanket on the bank’s earnings report. So far, Bank of America has received $45 billion in government loans, and Chief Executive Kenneth Lewis said on a conference call that “we absolutely don’t think we need additional capital," Reuters reported.
- The world’s biggest wireless provider, China Mobile Ltd. (CHN),…
Global Investing News: Oppenheimer (OPY), Alcoa (AA), General Motors (GM), Citigroup (C), etc.
Analyst: BofA Needs More Equity; Chrysler Working Fast on Fiat Alliance; India Stocks Near Six-Month High; Alcoa Posts Loss, Cuts Costs; SEC Approves Uptick Rule Proposals; Wholesale Inventories Post Record Drop; Auto Suppliers Get Bailout Funds; Oil Rallies on Surprise Distillate Drawdown
- Chris Kotowski, an Oppenheimer & Co. (OPY) analyst, said Bank of America Corp. (BAC) needs to raise $36.6 billion in equity to align capital ratios with those of its competitors. Kotowski also cut the bank’s quarterly earnings estimate to 2 cents a share from 10 cents because of higher than expected credit card and loan losses, Bloomberg reported.
- Seeking to avoid bankruptcy protection and…
GM, Peugeot CEOs Now Jobless
The Obama administration will give General Motors Corp. (GM) enough aid to restructure over the next two months – requiring Chief Executive Officer G. Richard Wagoner Jr. to resign as one of the conditions – and has told Chrysler LLC it must complete a deal with Italian automaker Fiat SpA (OTC ADR: FIATY), media reports stated yesterday (Sunday).
The administration is supposed to detail its plan for automaker aid today (Monday), Bloomberg News said yesterday.
Indeed, yesterday was a tough day for the world’s automakers in general – and should serve to underscore just how much overcapacity exists in the global automobile market.
The board…
30Mar2009 | Money Morning | 0 comments | ContinuedAuto Bailout: If You Thought it Was Ridiculous Before
To be honest, I figured General Motors would be in bankruptcy by now. With a monthly burn rate estimated to be between $2 billion and $6 billion (depending on source) it would seem this money hole would have imploded sooner rather than later.
But with the stimulus package signed and the goal of creating or saving 3.5 million jobs (on a side note, if anyone knows how you calculate “saved” jobs please let me know – it seems if 3.5 million people are still working by the time the next election rolls around, this will be a “success”) and hundreds…
24Feb2009 | Q1 Publishing | 0 comments | ContinuedGMAC Loosens Credit Reins After $6 Billion Treasury Loan
The U.S. Treasury has agreed to lend $6 billion to GMAC LLC (GOM), the financing arm of General Motors Corp. (GM), in the latest government effort to keep the biggest U.S. automaker out of bankruptcy.
GMAC immediately announced looser credit lending standards that could make approximately 60 million Americans eligible for its car loans and leases. The company also said it would expand further into the retail banking industry with plans to access even more funds from the Treasury’s Troubled Asset Relief Program (TARP).
GMAC will “continue to pursue†other ways to boost liquidity, including applying for a Federal Deposit Insurance…
31Dec2008 | Money Morning | 0 comments | ContinuedGMAC: A Sign of the Times
WASHINGTON — The Treasury Department said Monday that it will provide $5 billion to GMAC Financial Services LLC, the ailing financing arm of General Motors Corp., from the $700 billion bank rescue program.(The Huffington Post)
GMAC will also potentially receive up to $1 billion from the Treasury in the form of an equity purchase. Shocking right? Not if you have two eyes and can read beyond a 4th grade level.
Back in the first week of September I shared with you this figure from Ty Andros.
* Lehman Brothers (LEH)–11-13%
* Merrill Lynch (MER)–11-12%
* Morgan Stanley (MS)–9-10%
* Citigroup (C)–9 ½-10…
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