General Motors Corp. is likely to file for bankruptcy within the next five days after the too few bondholders showed interest on in swapping debt for stock.
GM has until Monday to complete a government-ordered restructuring that includes debt reduction, labor cost cuts and plant closures.
The nation's largest automaker planned to exchange $27 billion in unsecured debt for 10 percent of the company's stock leaving bondholders dissatisfied with the prospect of owning only 10 percent resulting in a likely Chapter 11 reorganization.
GM has received $19.4 billion in federal loans.
GM shares lost 16 cents, or 11.1 percent, at $1.28 in premarket trading.
The GM board of directors will be meeting to discuss GM's next steps in light of the expiration of the exchange offers, said the company's statement.
The Obama administration has said it would only provide more funds if 90 percent of the bondholders, as well as unionized workers, agreed to concessions that substantially reduced GM's costs.
Chrysler filed for bankruptcy protection April 30, after the government ended talks with a group of holdout bondholders.
Car makers have been struggling worldwide as demand for new vehicles slumped.