GENERAL MOTORS 
By
-- Common stock plus accrued interest in cash offered for $27 billion of
outstanding public debt
-- Successful exchange to result in at least $44 billion reduction in total
liabilities from bondholders, U.S. Treasury and VEBA
-- Bondholders to own 10 percent of GM after successful exchange offer
-- Exchange contingent on VEBA modifications and U.S. Treasury debt
conversion conditions resulting in at least $20 billion reduction in
liabilities
-- Expect to seek bankruptcy relief if the exchange offers are not
consummated
General Motors announced today that it is commencing public exchange offers for
GM is offering to exchange 225 shares of GM common stock for each
GM believes its restructuring plan and the successful consummation of the exchange offers will provide the best path for the future success of the company while enabling it to continue operating its business without the negative impacts of a bankruptcy and reducing the risk of a potentially precipitous decline in revenues in a bankruptcy.
In the event that GM does not receive prior to
Concurrently with the exchange offers, GM is soliciting consents from noteholders to amend the terms of the debt instruments that govern each series of notes and insert a call option to redeem the non-USD notes.
Each of the exchange offers and consent solicitations will expire at
Consummation of the exchange offers is conditioned upon the satisfaction or waiver of several conditions including the following:
-- U.S. Treasury Condition: the results of the exchange offers shall be
satisfactory to the U.S. Treasury, including in respect of the overall
level of participation by noteholders in the exchange offers and in
respect of the level of participation by holders of the Series D notes
in the exchange offers. GM believes that at least 90 percent of the
aggregate principal amount of outstanding notes, including at least 90
percent of the aggregate principal amount of the outstanding Series D
notes due June 1, 2009, will need to be tendered in the exchange offers
or called for redemption pursuant to the call option (in the case of
non-USD notes) in order to satisfy the U.S. Treasury condition. Whether
this level of participation in the exchange offers will be required (or
sufficient) to satisfy the U.S. Treasury condition will ultimately be
determined by the U.S. Treasury.
-- Completion of the U.S. Treasury Debt Conversion: the U.S. Treasury (or
its designee) shall have been issued at least 50 percent of the pro
forma common stock of GM in exchange for (a) the full satisfaction and
cancellation of at least 50 percent of GM's outstanding U.S.
Treasury debt at June 1, 2009 (such 50 percent currently estimated to be
approximately $10.0 billion) and (b) full satisfaction and cancellation
of GM's obligations under the warrant issued to the U.S. Treasury
as part of one of the U.S. Treasury loan agreements.
-- Evidence of the U.S. Treasury Financing Commitment: the U.S. Treasury
having provided commercially reasonable evidence of its commitment to
provide GM an additional $11.6 billion of funding that GM currently
forecasts it will require after May 1, 2009.
-- Binding agreements in respect of the VEBA Modifications and U.S.
Treasury approval thereof: GM is engaged in ongoing negotiations
regarding modifications required by the terms of one of the U.S.
Treasury loan agreements to a new voluntary employee benefit association
(the new VEBA) established as part of a settlement with The
International Union, United Automobile, Aerospace and Agricultural
Implement Workers of America (the UAW) and the class of UAW GM retirees.
A condition to the consummation of the exchange offers is that (a) at
least 50 percent (or approximately $10 billion) of GM's future
financial obligations to the new VEBA will be extinguished in exchange
for GM common stock and (b) cash installments will be paid over a period
of time toward the remaining amount of GM's financial obligations
to the new VEBA. It is also a condition to the exchange offers that the
terms of the VEBA modifications shall be satisfactory to the U.S.
Treasury.
-- The aggregate number of shares of GM common stock issued or agreed to be
issued pursuant to the U.S. Treasury Debt Conversion and the VEBA
Modifications shall not exceed 89% of the pro forma outstanding GM
common stock (assuming full participation by holders of old notes in the
exchange offers).
-- Binding agreements regarding labor modifications required under one of
GM's U.S. Treasury loan agreements, on such terms as shall be
satisfactory to the U.S. Treasury.
GM will use its best efforts to enter into the agreements listed above, however, GM has not reached any agreements with respect to any of the conditions to the exchange offers, and there is no assurance that any agreements will be reached on the terms described above or at all. GM will disclose the terms of any agreement reached with respect to either the U.S. Treasury debt conversion or the VEBA modifications and currently expects to be able to do so prior to the withdrawal deadline of the exchange offers.
The aggregate amount of GM common stock to be issued to the U.S. Treasury (or its designee) pursuant to the U.S. Treasury debt conversion and to the new VEBA pursuant to the VEBA modifications would represent approximately 89 percent of the pro forma GM common stock (assuming full participation in the exchange offers), with the final allocation between the U.S. Treasury (or its designee) and the new VEBA to be determined in the future. Of the remaining pro forma outstanding GM common stock, noteholders would represent approximately 10 percent, and existing GM common stockholders would represent approximately 1 percent. We determined the foregoing GM common stock allocations following discussions with the U.S. Treasury where the U.S. Treasury indicated that it would not be supportive of higher allocations to the holders of notes or to existing GM common stockholders.
The exchange offers have not commenced outside
Morgan Stanley & Co. Incorporated and Banc of America Securities LLC are serving as global coordinators in connection with the exchange offers.
Series of Notes
CUSIP Outstanding Title of Notes Applicable Shares Accrued
/ISIN Principal to be Tendered Debt of GM Interest
Amount Instrument Common per
Stock 1,000
Offered U.S.
per Dollar
1,000 Equivalent
U.S. as of
Dollar June 30,
Equivalent 2009
(3)
USD Notes
370442691 USD 1.50% Series D 1995 225 $7.50(4)
1,001,600,875 Convertible Indenture
Senior Debentures
due June 1, 2009
(2)
370442BB0 USD 7.20% Notes due 1995 225 $33.00
1,500,000,000 January 15, 2011 Indenture
37045EAS7 USD 9.45% Medium-Term 1990 225 $11.81
48,175,000 Notes due Indenture
November 1, 2011
370442BS3 USD 7.125% Senior 1995 225 $32.66
1,000,000,000 Notes due July Indenture
15, 2013
370442AU9 USD 7.70% Debentures 1995 225 $16.04
500,000,000 due April 15, Indenture
2016
370442AJ4 USD 8.80% Notes due 1990 225 $29.09
524,795,000 March 1, 2021 Indenture
37045EAG3 USD 9.4% Medium-Term 1990 225 $11.75
15,000,000 Notes due July Indenture
15, 2021
370442AN5 USD 9.40% Debentures 1990 225 $43.08
299,795,000 due July 15, 2021 Indenture
370442BW4 USD 8.25% Senior 1995 225 $37.81
1,250,000,000 Debentures due Indenture
July 15, 2023
370442AV7 USD 8.10% Debentures 1995 225 $43.88(5)
400,000,000 due June 15, 2024 Indenture
370442AR6 USD 7.40% Debentures 1990 225 $24.46
500,000,000 due September 1, Indenture
2025
370442AZ8 USD 6 3/4% Debentures 1995 225 $11.06
600,000,000 due May 1, 2028 Indenture
370442741 USD 4.50% Series A 1995 225 $14.88
39,422,775 Convertible Indenture
Senior Debentures
due March 6, 2032
(2)
370442733 USD 5.25% Series B 1995 225 $17.35
2,600,000,000 Convertible Indenture
Senior Debentures
due March 6, 2032
(2)
370442717 USD 6.25% Series C 1995 225 $28.65
4,300,000,000 Convertible Indenture
Senior Debentures
due July 15, 2033
(2)
370442BT1 USD 8.375% Senior 1995 225 $38.39
3,000,000,000 Debentures due Indenture
July 15, 2033
370442AT2 USD 7.75% Discount 1995 225 n/a
377,377,000 (1) Debentures due Indenture
March 15, 2036
370442816 USD 7.25% Quarterly 1995 225 $15.10
575,000,000 Interest Bonds Indenture
due April 15,
2041
370442774 USD 7.25% Senior Notes 1995 225 $15.10
718,750,000 due July 15, 2041 Indenture
370442121 USD 7.5% Senior Notes 1995 225 $18.54
720,000,000 due July 1, 2044 Indenture
370442725 USD 7.375% Senior 1995 225 $9.22
1,115,000,000 Notes due May 15, Indenture
2048
370442BQ7 USD 7.375% Senior 1995 225 $7.58
425,000,000 Notes due May 23, Indenture
2048
370442766 USD 7.375% Senior 1995 225 $18.23
690,000,000 Notes due October Indenture
1, 2051
370442758 USD 7.25% Senior Notes 1995 225 $9.06
875,000,000 due February 15, Indenture
2052
Euro Notes
XS0171942757 EUR 7.25% Notes due July 3, 225 $71.81
1,000,000,000 July 3, 2013 2003 FPAA
XS0171943649 EUR 8.375% Notes due July 3, 225 $82.49
1,500,000,000 July 5, 2033 2003 FPAA
GM Nova Scotia Notes
XS0171922643 GBP 8.375% Guaranteed July 10, 225 $47.02
350,000,000 Notes due 2003 FPAA
December 7, 2015
XS0171908063 GBP 8.875% Guaranteed July 10, 225 $86.20
250,000,000 Notes due July 2003 FPAA
10, 2023
(1) Represents the principal amount at maturity. The exchange
consideration offered to holders of discount notes will be based on the
accreted value thereof as of the settlement date. As of June 30, 2009, the
accreted value of the discount notes will be $568.94 per $1,000 principal
amount at maturity thereof.
(2) Denotes convertible notes.
(3) For illustrative purposes only. The amount of accrued interest payable
on the settlement date in respect of tendered notes, other than the
discount notes, will be the amount of accrued interest on such notes from
and including the most recent interest payment date to, but not including,
the settlement date. We do not expect to consummate the exchange offers
prior to June 30, 2009 because the satisfaction of certain conditions to
the exchange offers is expected to require a significant period of time.
(4) Represents accrued interest per $1,000 principal amount as of June 1,
2009.
(5) Represents accrued interest on such notes from and including December
15, 2008. Such amount does not reflect, and has not been reduced for, the
interest payment scheduled for June 15, 2009.
For More Information Regarding the Exchange Offer
The exchange offers and consent solicitations are being made to holders of notes (as set forth in the table above titled Series of Notes) solely upon the terms and subject to the conditions set forth in the Registration Statement on Form S-4 dated
GM and its directors and executive officers and other members of management and employees may be deemed participants in the solicitation of proxies with respect to the consent solicitations. Information regarding the interests of these directors and executive officers in the consent solicitations will be included in the documents described above. Additional information, including information regarding GM's directors and executive officers, is available in GM's Annual Report on Form 10-K, which was filed with the SEC on
Cautionary Statement
A registration statement relating to the securities offered in the exchange offers has been filed with the SEC but has not yet become effective. The securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. The exchange offers and consent solicitations are not being made to (nor will tenders be accepted from or on behalf of) holders of notes in any jurisdiction where the offers or the acceptance thereof would not be in compliance with the securities or other laws of such jurisdiction, including
Offers to holders in the
Forward Looking Statements
This document contains "forward-looking statements." Such statements are based on the current expectations and assumptions of GM management, and as such involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those now anticipated - both in connection with the proposed exchange offers and consent solicitations, and GM's business and financial prospects -- including (without limitation) those set forth in the Prospectus Documents filed with the SEC as part of GM's Registration Statement on Form S-4 (as amended and supplemented). To better understand these risks and uncertainties, holders of notes and other readers are encouraged to read carefully the Prospectus Documents (as amended or supplemented), GM's Annual Report on Form 10-K for the fiscal year ended
About General Motors Corp.
General Motors Corp. (NYSE: GM), one of the world's largest automakers, was founded in 1908, and today manufactures cars and trucks in 34 countries. With its global headquarters in
SOURCE General Motors Corporation
