The United States automobile manufacturing firm General Motors announced on Wednesday that most of its bondholders did not exchange GM's US$27 billion debt for a ten percent share in the company's stock.
The automaker, in financial straits, has a June 1 deadline to finish a government restructuring plan that includes plant closures and other debt reduction measures. U.S. President Barack Obama's administration said it would not give more financial aid to the firm unless 90% of GM's bondholders would agree on compromises that would significantly reduce the firm's costs.
"The principal amount of notes tendered was substantially less than the amount required by GM to satisfy the debt reduction requirement," GM said in a statement.
"They said no. That's it. They tried. That's why they're going to have to file for bankruptcy," said a university professor from the University of Michigan who specializes in bankruptcy.
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