The sale of substantially all of General Motors Corporation’s assets to NGMCO Inc, an entity funded by the US Department of the Treasury, has been approved by US Bankruptcy Court.
The approval is a vital step as General Motors bids to come out of bankruptcy, with the US Treasury having previously stated it would halt funding to GM if the asset sale were not concluded by July 10.
Now, NGMCO Inc will change its name to General Motors Company and continue to operate under the company’s historic brands. The current General Motors Corporation meanwhile, will change its name to Motors Liquidation Company with retained assets to be wound down or sold.
The new company is set to acquire GM’s strongest operations and should have a more competitive operating cost structure. It will have a lower leverage and stronger balance sheet, which will allow it to reduce its risk and operate profitably at lower volume levels.
Its headquarters will be in Detroit and it will be led by Fritz Henderson as president and chief executive officer, while Edward E Whitacre Jr will take the role of chairman of the board of directors. Its common stock meanwhile will be owned predominantly by the US Department of the Treasury at 60.8 per cent compared to 17.5 per cent for the UAW Retiree Medical Benefits Trust; 11.7 per cent by the Canada and Ontario Governments; and 10 per cent by the old GM.
It is expected that old GM employees will be offered positions with the new company.
