The United States automobile manufacturing firm General Motors announced on Wednesday that most of its bondholders did not agree to exchange the company's debt of more than US$27 billion for a ten percent share in the company's stock for the federal government.

The automaker, in financial straits, has a June 1 deadline to finish a government-mandated restructuring plan that includes plant closures and some asset liquidation, in addition to other debt reduction measures. US President Barack Obama's administration said it would not give more financial aid to the firm unless 90% of GM's bondholders would agree on compromises that would significantly reduce the firm's operating costs.

"The principal amount of notes tendered was substantially less than the amount required by GM to satisfy the debt reduction requirement," GM said in a statement.

"They said no. That's it. They tried. That's why they're going to have to file for bankruptcy," said a professor of economics from the University of Michigan who specializes in bankruptcy.

Content courtesy of Wikinews.