In Michigan
6:30 am
Thu April 16, 2009

GM preparing to make official bond exchange offer

Detroit, MI – Detroit, MI (AP)

General Motors Corp. says its preparing to launch a public bond-exchange offer that would let the company start slashing its debt, even without an agreement from a committee of large institutional bondholders.

The Detroit automaker has been working on a plan to wipe out
most of its $28 billion unsecured debt by June 1 to avoid
bankruptcy.

GM spokeswoman Julie Gibson said Thursday that the only way to reach the company's thousands of bondholders before the government deadline is to formally offer a debt exchange and see who accepts it.

She declined to reveal any details about the terms of the offer.

Some of GM's largest bondholders formed a committee to negotiate a debt exchange with the company.

But they haven't met with the company since March, and its unclear if they will have any say in GM's offer.