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Canadian taxpayers to hold GM shares

Globe and Mail Update

The federal and Ontario governments will receive preferred and common shares in a recapitalized General Motors Corp., in return for providing a portion of the auto maker's debt financing the company said in a regulatory filing today.

GM has reached a deal with its debt holders to also take a stake in the company if they support a plan to split the company in a so-called 363 bankruptcy protection filing that hives off some assets to be liquidated, while other assets form the basis of the recapitalized entity, the filing said.

Debt holders will get as much as 15 per cent in the new company, compared with a previous offer of 10 per cent in return for swapping $27-billion (U.S.) in debt.

The filing does not reveal what percentage the Canadian governments will receive in the new company.

Ontario Finance Minister Dwight Duncan would not comment on Canadian taxpayers' ownership of equity in GM.

“The truth is that these discussions are still going on,” Mr. Duncan told reporters on Thursday. “There's too many moving parts in this.”

He said he is optimistic about the future of General Motors in Canada, even if, as expected, the company files for bankruptcy protection. The restructuring deal will give Canada a chance to start again and rebuild the industry, he said.

“I am optimistic that we will continue to have a viable presence of GM in Oshawa, in St. Catharines, in Ingersoll and that we will protect the footprint of the industry in Ontario,” he said. “It will be very different, it may not be as large as it was at one time.”

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