More than half of General Motors Corp. bondholders have accepted a debt-for-equity exchange offer that would give them a warrant of 15 percent more stake in a reorganized GM.

The new deal won a 54-percent support before the deadline of 5 p.m. EDT on Saturday, according to a statement issued on Sunday by a group of ad hoc institutional bondholders. Under the new offer, bondholders have a recovery of around 9 cents on the dollar, up from an estimate of zero to 5 cents under the previous offer.

Last week, investors holding US$27.2 billion in GM's bond rejected a swap proposal that would have given them a 10-percent stake in a new GM.

GM announced in a statement that the U.S. Treasury is "satisfied" with bondholder support, though not mentioning whether the support has been enough. Treasury had demanded 90 percent participation from bondholders for the previous offer.

The agreement is believed to be able to make the automaker's most probable bankruptcy smoother. Last Friday, the United Auto Workers union ratified a labor contract with an overwhelming 74-percent approval. A health-care trust of the UAW will get 17.5 percent stake with the right to buy an additional 2.5 percent stake.

GM, which has been struggling to stay afloat despite an injection of US$19.4 billion of taxpayer money, is expected to announce filing for bankruptcy protection in New York on Monday. GM President and CEO Fritz Henderson will hold a media briefing in the GM Building in Manhattan mid-day Monday. U.S. President Barack Obama is also likely to discuss the next steps in GM's reorganization at that time.

(Xinhua News Agency June 1, 2009)