Kingdom Holding Co. said the investment firm and its chairman, Saudi Arabian billionaire Prince Alwaleed Bin Talal, invested $500 million in General Motors Co.’s recent initial public offering. The transaction represents 1% of the value of GM’s subscriptions, Kingdom Holding said Tuesday in a statement emailed to Zawya Dow Jones. The firm cited “the global strength of the General Motors brand, the relatively attractive offering price, and the company’s growth prospects in Brazil and China.” [WSJ]
GM
Closest without going over, guesses in by 3PM EST. Winner gets your choice of dinner with Dan Akerson or a visit from The Sandwich Fairy (TSF) at lunch tomorrow.
Why does General Motors take it up the tailpipe? You could probably come up with at least handful of reasons, but at a breakfast hosted by Fortune this morning, Steve Rattner wanted to highlight one in particular. Over bagels and lox, the retired Car Czar, who last month was finally able to get it off his chest that automaker’s PowerPoint presentations were for shit, said that the higher-ups took no responsibility for their action and spent most of their time smack talking the “competition.”
On Rattner’s conversation with former GM CEO Rick Wagoner when he told him he was fired: “The most curious part of it was that after three to four minutes of chit chat he asked ‘Well are you going to fire Ron Gettelfinger too?’…And I said, ‘Look I’m not in charge of firing Ron Gettelfinger’… One of the problems with GM is that they blame everyone but themselves for their problems…But the fact is, Ford is doing OK and there is no reason why GM had to be in this position.”
Also, don’t talk to him about socialism.
In addition to spending$950 million to wind down the old GM, the new GM may have unintentionally found a way to send a tough message to the UAW workers looking to milk the system and retire in their 40s. In 2007, the UAW and GM struck a deal which allowed GM to cut its work force and avoid severance packages by offering early retirement to tens of thousands of workers. While that sounds predictably foolish by auto industry standards, the real hiccup comes in the form of GM not having to make contributions to the fund until 2013. Consequently the pension fund may only have 20 years left before it runs out of cash, leaving newly retired 40-somethings faced with a daunting choice- roll the dice with fund or, perish the thought, find a job.
Retired From G.M. at 54. Pensionless at 74? [NYT]
Among the bills that GM may need to pay with their additional $30 billion infusion are massive fees due to two of the only big winners in the GM debacle, Evercore Partners and turnaround consultants AlixPartners. For their impressive work overseeing the automaker’s complete collapse, Evercore and AlixPartners are seeking fees totalling a cool $130 million, which includes a combined $30.9 million in success fees. But the US Trustee overseeing the bankruptcy thinks the “staggering” and “excessive” fees aren’t well deserved and is worried about one of AlixPartners’ fees in particular. As a token of its appreciation, GM agreed to pay the firm a “discretionary fee” that has “no boundaries in amount and scope” and no clear method of calculation.
Trustee Objects to Fees for G.M. Advisers [Dealbook]
Just a reminder that GM will hold an analyst and media call this morning at 9:30 Eastern time. Details below:
Note that charts for the call will be posted on the investor site. (They are a little tricky to find — please follow the directions carefully.)
We hope you will join us.
Tom Wilkinson
Director, GM News Relations
Reuters reports that General Motors will sell Hummer, though a buyer has not been named, nor has a number been quoted for how much it’ll pay. And then there’s this, from the mailbag:
I saw David Rubenstein and Rahm Emanuel (with one other unidentified guy) eating dinner at Blue Duck Tavern in DC last night. There is an outdoor seating area, which is where they were. They were actually looking somewhat awkward, not sure what to make of that. I do remember they were twins with their navy suit and red ties (it is Rubenstein after all), probably planned that. I’m not saying Carlyle bought Hummer, but I’m not saying it.
After performing a victory dance through the streets of downtown Detroit, which onlookers tell us was quite the sight to see, Mikey sat down to write a list of suggestions he’s got for what to do with the place. Do we sense someone angling for a ride in Fritz Henderson’s sidecar?
So here we are at the deathbed of General Motors. The company’s body not yet cold, and I find myself filled with — dare I say it — joy. It is not the joy of revenge against a corporation that ruined my hometown and brought misery, divorce, alcoholism, homelessness, physical and mental debilitation, and drug addiction to the people I grew up with. Nor do I, obviously, claim any joy in knowing that 21,000 more GM workers will be told that they, too, are without a job.
Twenty years ago when I made “Roger & Me,” I tried to warn people about what was ahead for General Motors. Had the power structure and the punditocracy listened, maybe much of this could have been avoided. Based on my track record, I request an honest and sincere consideration of the following suggestions:
Pleading, urging, begging, whatever. Call it what you will, this one isn’t going to drift by as “easily” as Chrysler. But then, the Chicago machine is just getting warmed up, isn’t it? Either way, we continue to be amused by the (1 – 0.65) reverse spin on the debt holder (dis)approval numbers.
Advisers to General Motors Corp bondholders representing $27 billion in the automaker’s debt urged investors on Friday to support a debt swap negotiated over the past week with the Obama administration.
Bondholders have until Saturday to register their support for the terms of a deal that would give them up to 25 percent of a reorganized GM. That offer is contingent on the U.S. Treasury determining that enough investors have signed on in support.
Investors representing at least 35 percent of GM’s bonds are expected to support the sweetened offer from the U.S. Treasury, which will be the automaker’s largest shareholder and creditor.
In a conference call open to GM bondholders, advisers to an ad hoc committee representing institutional investors urged other bondholders to offer their support for the deal.
But we wonder if the real story here isn’t this:
For the government to be repaid in full, GM would have to have an enterprise value of $69 billion based on its expected 72.5 percent stake in the company, Siegert said.
Really, the jobs we are “saving” are getting obscenely expensive. What happened to a “bridge loan” and the rough backhand pimp-slap that Treasury and company were supposed to deliver to a GM that was not viable by the deadline?
In the latest GM clusterfuck drama, the Wall Street Journal flashes the pressing news that a group of unsecured GM noteholders has agreed to the latest 10% debt for equity swap amusement. Outstanding work guys and gals! How many votes have you got in the bag?
We have been informed by the advisors to the unofficial committee of unsecured GM Noteholders, Houlihan Lokey Howard & Zukin Capital, Inc. (financial advisors) and Paul, Weiss, Rifkind, Wharton & Garrison LLP (legal counsel), that the unofficial committee and other large Noteholders (who collectively hold approximately 20% in aggregate principal amount of the Notes) support the economic terms of the Proposal. (emphasis added)
Oh. Need we point out that this appears to suggest you have failed to obtain agreement from 80% of the unsecured debtholders? So, do the ad hoc and the official credit committee agree? Any news on secured debt holders. Anyone? Anyone? Bueller? Bueller?
Maybe we were a bit quick ordering the Presidential Suite for the weekend.
GM’s SEC Filing on the Treasury Offer [The Wall Street Journal]
It’s one thing to say that a firm might be better off in bankruptcy. It is another entirely to prod it down the plank towards the sea.
General Motors Corp.’s 60-day deadline to restructure is unlikely to be extended because the U.S. won’t repay $1 billion in convertible notes maturing June 1, according to a person with knowledge of the discussions.
President Barack Obama’s auto task force told the biggest U.S. automaker it doesn’t want taxpayer funds used to repay debt maturities, said the person, who declined to be identified because the talks are private. Detroit-based GM has $1 billion of 1.5 percent convertible securities coming due June 1. The debentures, issued in increments of $25, fell $2.05 to $7.20 as of 1:56 p.m. in New York, which would be the lowest closing price since December, according to data compiled by Bloomberg.
Funny, we don’t remember any sort of squeamishness about “taxpayer funds used to repay debt maturities,” before now. Why the sudden change in heart?
GM Said to Be Warned Government Won’t Make June 1 Debt Payment [Bloomberg]
