U.S. government wants equity stake in General Motors (GM)

There are reports that the U.S. government is looking for an equity stake in general Motors Corp. (GM). It is thought that the U.S government will use the $13.4 billion that it has lent GM in exchange for an equity stake.

Bloomberg have said that a government stake in the troubled automaker would accompany a smaller share of the new company for bondholders; they currently own $27.5 billion in GM debt. Bondholders have been offered 90 percent of the new entity’s equity; this was before the government rejected the previous restructuring plan.

If this rumor were true then it would help to cut down General Motors debt, this is needed before June 1, as this is the deadline where the plan needs to become viable. If the government does have a stake in GM, then they will look for a quick sale.

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