GM makes preparations for bankruptcy filing - report

08 April 2009 17:03  [Source: ICIS news]

US automaker GM mulls bankruptcy - reportHOUSTON (ICIS news)--Shares of General Motors (GM) fell by nearly 4% to $1.92 in early Wednesday trading on the New York Stock Exchange (NYSE) following a report from Reuters that the US automaker is in intense preparations for a possible bankruptcy filing.

A plan to split GM into a new company comprised of the most successful units and an old one of less-profitable units is gaining momentum, a source told Reuters.

Moreover, if the plan goes through, the new GM would then be expected to assume some previous creditor debt from bankruptcy proceedings, including secured debt, Reuters reported.

The company has until 1 June to complete a reorganisation plan.

Automobiles are an important chemical end market, with each vehicle having an average of $2,200 (€1,650) worth of chemistry, according to the American Chemistry Council (ACC).

Automobile parts include rubber hoses, plastic dashboards, catalysts, fibres, adhesives and coatings.

GM shares fell significantly on Tuesday on the report, dropping 11.9% to close at $2.00/share.

($1 = €0.75)

Paul Hodges studies key indicators affecting the chemical industry in his Chemicals and the Economy blog.
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By: Ben DuBose
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