GM warns it may run out of cash
General Motors has warned that billions of dollars in government aid may not prevent it from running out of cash if vehicle sales do not improve soon.
In a regulatory filing, GM, which was overtaken by Toyota as the world’s biggest carmaker last year, underlined the magnitude of its liquidity crisis by warning that it cannot afford to repay a $1bn bond maturing on June 1. The bond is part of $27bn in unsecured debt that GM is seeking to restructure through a debt-for-equity exchange.
Bondholders’ advisers were due to meet on Thursday afternoon with the US government task force overseeing GM’s restructuring. They were ex-pected to ask for a guarantee on new securities that GM would issue as part of its debt restructuring.
GM’s filing repeatedly raises the spectre of a possible bankruptcy filing, in spite of warnings that such a move would be costly and could do irreparable harm to its image in the marketplace.
This article was originally posted on FT.com