It now appears that the sale of GM's main European division is a done deal, and it also looks possible that they will essentially give the car company away, "According to a person familiar with GM’s thinking, an investor will be asked to pay at least €500m ($652m) in equity but the carmaker will realise no financial gain as the money will be injected directly into Opel."
I note without surprise that Cerberus, the private equity firm that owns Chrysler, is not interested in getting a piece of this deal.
When Cerberus bought Chrysler, they expected to hold onto it for perhaps 6 months, and then sell it to GM. Their model was flip and flee, not sensibly operate a company as a going concern.
Meanwhile, on the worker benefits front, it looks like GM Sand the UAW will be renegotiating their benefits deal, replacing much of the cash promised with an ownership stock in GM.
There is very little that I am sure of, but one is that when employees get an ownership stake in lieu of payment, they get the shaft.
In other GM News, it now appears that the normal 2 week end of year shutdown will be extended to 9 weeks, which makes sense when you look at how moribund car sales are, and they spooked the market by saying that was unlikely that they would be making a $1 billion debt payment in July, though they are saying that this is because they will have restructured the debt.
There is also a report that the US government will move to convert GM's debt to it into equity, which will likely make the taxpayer the largest shareholder of the automotive giant.
Meanwhile, the Treasury is directing Chrysler to prepare for a bankruptcy filing, and not because, as the chattering class is so fond of asserting, the union is being unreasonable, but because the banks and other debt holders are.
Chrysler lenders offer to cut debt, take stock - Apr. 21, 2009, see here,
here, here, and here.
Basically, the market value on their debt is about 15%, and they want something north of 85%.
No comments:
Post a Comment