The offer made by GM calls for the exchange of 225 shares of its common stock for each $1,000 equivalent principal amount of its outstanding notes of each series set forth in the prospectus. The exchange offers in Europe are not being made to holders of notes in any jurisdiction in which its acceptance would not be in compliance with the securities, blue sky or other laws.
In any jurisdiction in which such laws require the offers to be made by a licensed broker or dealer, the offers will be deemed to be made on behalf of GM by one or more of the dealer managers. In light of this, GM will make the offer through the prospectus in the following countries: United Kingdom, Austria, Belgium, France, Germany, Italy, Luxembourg, the Netherlands, Spain and Switzerland.
The exchange offers are available for solicitation until May 26 and they are, basically, all that now stands in between GM and a costly Chapter 11 filling.
As the company stated in a release yesterday, "in the event that GM does not receive prior to June 1, 2009 enough tenders of notes to consummate the exchange offers, GM currently expects to seek relief under the U.S. Bankruptcy Code. GM is considering its alternatives in seeking bankruptcy relief in consultation with the U.S. Treasury, GM's largest lender."
As for the bondholders, here's what they say about the offer: "The current offer is neither reasonable nor adequate. It is a blatant disregard of fairness for the bondholders."
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