India and the Two Faces of General Motors

We always seem to hear this:

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GM warns it may run out of cash

By Bernard Simon in Toronto and John Reed in London

Published: March 5 2009 12:44 | Last updated: March 5 2009 19:01

"General Motors has warned that billions of dollars in government aid may not prevent it from running out of cash if vehicle sales do not improve soon.
In a regulatory filing, GM, which was overtaken by Toyota as the world’s biggest carmaker last year, underlined the magnitude of its liquidity crisis by warning that it cannot afford to repay a $1bn bond maturing on June 1. The bond is part of $27bn in unsecured debt that GM is seeking to restructure through a debt-for-equity exchange.

Bondholders’ advisers were due to meet on Thursday afternoon with the US government task force overseeing GM’s restructuring. They were ex-pected to ask for a guarantee on new securities that GM would issue as part of its debt restructuring.

GM’s filing repeatedly raises the spectre of a possible bankruptcy filing, in spite of warnings that such a move would be costly and could do irreparable harm to its image in the marketplace.

Deloitte & Touche, [b]GM’s auditors, have expressed “substantial doubtâ€