DETROIT — General Motors said on Monday that it needed $11.6 billion more in government loans and that it planned to file for bankruptcy protection if a debt exchange with its bondholders was unsuccessful.þþG.M. also said that by 2010 it would phase out its Pontiac brand, eliminate 42 percent of its dealers, close 13 plants and cut 21,000 hourly jobs as part of its revised restructuring plan.þþ“We are taking tough but necessary actions that are critical to G.M.’s long-term viability,” G.M.’s chief executive, Fritz Henderson, said in a statement. “Our responsibility is clear — to secure G.M.’s future — and we intend to succeed. At the same time, we also understand the impact these actions will have on our employees, dealers, unions, suppliers, shareholders, bondholders, and communities, and we will do whatever we can to mitigate the effects on the extended G.M. team.”þþThe company said it would give bondholders 225 shares, worth $414 as of Friday, for every $1,000 that they hold. þþIt urged the bondholders, who hold more than $27 billion in G.M. debt, to accept the deal to allow a faster out-of-court restructuring and said their bonds could be worth less or nothing in a bankruptcy filing.þþIn a bankruptcy, G.M. said it might separate itself into two companies — a new G.M. composed of good assets like the Chevrolet and Cadillac brands, and a collection of its unwanted assets that would then be liquidated.þþG.M. said the holders of at least 90 percent of its outstanding bonds must agree to the swap by May 26 for the company to avoid bankruptcy.þþ“We do not intend to seek relief under the U.S. Bankruptcy Code if the exchange offers are consummated,” G.M. said in a regulatory filing.þþG.M. has been negotiating with an ad-hoc committee representing large bondholders, but the two sides have been unable to reach a deal. The bondholders committee says G.M. has not been responsive to its requests in more than a month.þþG.M. has scheduled a news conference with Mr. Henderson at 9 a.m. to unveil its revised restructuring plan. The plan is expected to call for more job cuts and plant closings.þþSince December, G.M. has borrowed $15.4 billion to keep it out of bankruptcy while it tries to restructure. The Obama administration’s autos task force gave the automaker until June 1 to develop a more aggressive turnaround plan and to reach deals with its bondholders and the United Automobile Workers union. Talks with the U.A.W., which announced a cost-cutting deal with Chrysler on Sunday, are continuing.þþ
Source: NY Times
