General Motors Corp's biggest bondholders plan to reject the company's current offer for a 10 percent equity stake, a spokesman for the creditors said on Friday.
The development suggested a hardening of positions by GM bondholders and the Obama administration over a bond exchange that threatens to send GM into bankruptcy.
GM's biggest bondholders of some $27 billion in unsecured debt last month pushed for a 58 percent stake in GM, which President Barack Obama's Auto Task Force has signaled is unrealistic.
It's been a universal no from the get-go, said Nevin Reilly, a spokesman for the committee. Bondholders are being seen as speculative bad guys, but bondholders are investors, many of whom put their retirement money into GM.
The big bondholders have no formal relationship with smaller retail GM investors, but Reilly said they have received many calls seeking to coordinate a response.
You know the bondholders are going to have to take some haircut, Austan Goolsbee, a member of the Obama administration's auto task force, told Reuters Television on Friday. Everybody has got to put some skin in the game.
Goolsbee said everybody has got to come together and make some sacrifices and that includes the bondholders for sure, he told Reuters.
(Reporting by Walden Siew, Editing by Kenneth Barry)