A day after filing for a bankruptcy reorganization that will be largely financed by U.S. taxpayers, General Motors Corp. said the private automaker that emerges from Chapter 11 expects to release less financial information to the public.
“As a privately held company, it’s likely we’re not going to disclose information except to the shareholders,” Ray Young, GM chief financial officer, said Tuesday.
Young noted that the company is expected to eventually go public again, when it will be subject to public reporting requirements. However, the company is still considering how much information to share as a private company.
Young’s comments echoed those from GM Chairman Kent Kresa on Monday.
“We do not have to file all of the same documents that we do when we are a public company,” said Kresa, who added that GM still would give updates on its progress. “We’re going to keep that transparency exactly the same.”
GM, which has lost more than $80 billion during the past four years, is staying afloat on $19.4 billion in federal loans and is on the way to receiving at least $30 billion more to finance its Chapter 11 reorganization. Detroit Free Press
“In most cases, shareholders get nothing,” Mr. Workman says. GM’s filing said it has $172 billion in debt and $82 billion in assets. “There’s no value there for equity holders.”
GM’s historic bankruptcy filing on Monday made it the second-largest industrial bankruptcy by asset size, behind WorldCom in 2002, and closed a lengthy chapter for the iconic U.S. auto maker.
The government’s plan calls for 10% of the new GM to be owned by existing bondholders, 17.5% to be owned by a United Auto Workers union health-care fund, 12.5% to be owned by the Canadian government, and 60% to be owned by the U.S. President Barack Obama has called the U.S. a “reluctant” shareholder in GM.
The U.S. Treasury is also offering bondholders warrants that would allow them to buy up to 15% of the new GM’s equity, on top of the 10% they would get for exchanging their bonds for stock.
Under that distribution, shareholders in the old GM wouldn’t receive shares of the new GM, a Treasury spokeswoman confirmed. Wall Street Journal
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