GM Launches Exchange Offers and Consent Solicitations for Outstanding Notes

DETROIT, April 27 /CNW/ --

    --  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
        consummatedGeneral Motors announced today that it is commencing public exchange
offers for $27 billion of its unsecured public notes. The exchange offers are
a vital component of GM's overall restructuring plan to achieve and sustain
long-term viability and the successful consummation of the exchange offers
will allow GM to restructure out of bankruptcy court.GM is offering to exchange 225 shares of GM common stock for each 1,000
U.S. dollar equivalent of principal amount (or accreted value as of the
settlement date, if applicable) of outstanding notes of each series set forth
in the table below and is offering to pay, in cash, accrued interest on the GM
notes from the most recent interest payment date to the settlement date. In
respect of the exchange offers for the GM Nova Scotia notes, General Motors
Nova Scotia Finance Company is jointly making the exchange offers with GM.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 June 1, 2009 enough
tenders of notes to consummate the exchange offers, GM currently expects to
seek relief under the U.S. Bankruptcy Code. GM is considering its alternatives
in seeking bankruptcy relief in consultation with the U.S. Treasury, GM's
largest lender. If GM seeks bankruptcy relief, noteholders may receive
consideration that is less than what is being offered in the exchange offers
and it is possible that such holders may receive no consideration at all for
their notes.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
11:59 p.m. New York City time on Tuesday, May 26, 2009, unless extended.
Tendered notes may be validly withdrawn at any time prior to 11:59 p.m. New
York City time on Tuesday, May 26, 2009, subject to certain circumstances
where we may extend or reinstate withdrawal rights.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 the United States and will
not commence until the requisite approvals are obtained from the appropriate
jurisdictions.Morgan Stanley & Co. Incorporated and Banc of America Securities LLC are
serving as global coordinators in connection with the exchange offers.Series of NotesCUSIP       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 Notes370442691      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   Indenture37045EAS7       USD         9.45% Medium-Term    1990     225      $11.81
                  48,175,000        Notes due      Indenture
                                 November 1, 2011370442BS3       USD           7.125% Senior      1995     225      $32.66
                1,000,000,000     Notes due July   Indenture
                                    15, 2013370442AU9       USD         7.70% Debentures     1995     225      $16.04
                 500,000,000       due April 15,   Indenture
                                       2016370442AJ4       USD         8.80% Notes due      1990     225      $29.09
                 524,795,000      March 1, 2021    Indenture37045EAG3       USD         9.4% Medium-Term     1990     225      $11.75
                  15,000,000      Notes due July   Indenture
                                     15, 2021370442AN5       USD         9.40% Debentures     1990     225      $43.08
                 299,795,000    due July 15, 2021  Indenture370442BW4       USD           8.25% Senior       1995     225      $37.81
                1,250,000,000     Debentures due   Indenture
                                   July 15, 2023370442AV7       USD         8.10% Debentures     1995     225    $43.88(5)
                 400,000,000    due June 15, 2024  Indenture370442AR6       USD         7.40% Debentures     1990     225      $24.46
                 500,000,000     due September 1,  Indenture
                                       2025370442AZ8       USD        6 3/4% Debentures     1995     225      $11.06
                 600,000,000     due May 1, 2028   Indenture370442741      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, 2033370442AT2       USD          7.75% Discount      1995     225       n/a
                377,377,000 (1)   Debentures due   Indenture
                                  March 15, 2036370442816      USD         7.25% Quarterly       1995     225      $15.10
                 575,000,000      Interest Bonds   Indenture
                                   due April 15,
                                       2041370442774      USD        7.25% Senior Notes     1995     225      $15.10
                 718,750,000    due July 15, 2041  Indenture370442121      USD        7.5% Senior Notes      1995     225      $18.54
                 720,000,000     due July 1, 2044  Indenture370442725      USD           7.375% Senior       1995     225       $9.22
                1,115,000,000   Notes due May 15,  Indenture
                                       2048370442BQ7       USD          7.375% Senior       1995     225       $7.58
                 425,000,000     Notes due May 23, Indenture
                                      2048370442766      USD          7.375% Senior        1995     225      $18.23
                 690,000,000    Notes due October  Indenture
                                     1, 2051370442758      USD        7.25% Senior Notes     1995     225       $9.06
                 875,000,000     due February 15,  Indenture
                                       2052Euro NotesXS0171942757      EUR       7.25% Notes due    July 3,    225      $71.81
                1,000,000,000    July 3, 2013      2003 FPAAXS0171943649      EUR       8.375% Notes due   July 3,    225      $82.49
                1,500,000,000    July 5, 2033      2003 FPAAGM Nova Scotia NotesXS0171922643      GBP      8.375% Guaranteed   July 10,   225      $47.02
                  350,000,000      Notes due       2003 FPAA
                                December 7, 2015XS0171908063      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 OfferThe 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 April 27, 2009, which includes a combined
prospectus and proxy statement and information in accordance with the
disclosure requirements of the tender offer rules of the Securities and
Exchange Commission (SEC), and the related letter of transmittal (or form of
electronic instruction notice, in the case of notes held through Euroclear or
Clearstream), as each may be amended from time to time (collectively, the
Prospectus Documents). GM strongly encourages you to carefully read the
Prospectus Documents, together with the Schedule TO relating to the exchange
offers (including all amendments and supplements thereto), that have been
filed (or will be filed) with the SEC, because they contain important
information regarding the proposed transaction. Noteholders can access free
copies of the Prospectus Documents and the Schedule TO at the SEC's website
(at www.sec.gov), and at GM's website (at
http://www.gm.com/corporate/investor_information). Any requests for paper
copies of the Prospectus Documents and/or the Schedule TO should be directed
to the D.F. King & Co. by mail at 48 Wall Street, 22nd floor, New York, NY
10005, and by telephone at (800) 769-7666.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 March 5, 2009 and can be obtained without charge at
www.sec.gov.Cautionary StatementA 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 Japan and Hong Kong.Offers to holders in the United Kingdom, Austria, Belgium, France,
Germany, Italy, Luxembourg, the Netherlands, Spain and. Switzerland will be
made only following the approval of a separate prospectus approved by the
United Kingdom Listing Authority as competent authority under EU Directive
2003/71/EC, which will indicate on the front cover thereof that it can be used
for such offers. Outside of these jurisdictions (and the United States) only
non U.S. qualified offerees are authorized to participate in the exchange
offers and consent solicitations. If you are outside of the above
jurisdictions (and the United States and Canada), you are only authorized to
receive the EU Approved Prospectus. If you are in Canada you are only
authorized to receive and review a separate Canadian offering memorandum
prepared in accordance with applicable Canadian securities laws. The exchange
offers in Italy are subject to clearance by CONSOB pursuant to Article 102
onwards of Legislative Decree No. 58 of February 24, 1998. Therefore, the
exchange offer period in Italy will only commence following such clearance.Forward Looking StatementsThis 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
December 31, 2008 which was filed March 5, 2009, and other SEC filings, all of
which can be accessed free of charge at the websites of the SEC (www.sec.gov)
and GM (at http://www.gm.com/corporate/investor_information).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 Detroit, GM employs 243,000 people in every
major region of the world, and sells and services vehicles in some 140
countries. In 2008, GM sold 8.35 million cars and trucks globally under the
following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Hummer,
Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's largest national market
is the United States, followed by China, Brazil, the United Kingdom, Canada,
Russia and Germany.  GM's OnStar subsidiary is the industry leader in vehicle
safety, security and information services.  More information on GM can be
found at www.gm.com.
For further information: Julie M. Gibson, GM Financial Communications,
+1-212-418-6381, Julie.m.gibson@gm.com, Renee Rashid-Merem, GM Communications,
+1-313-665-3128, Renee.rashid-merem@gm.com Web Site: http://www.gm.com