Federal aid to avoid bankruptcy has forced GMAC to change finance offers to General Motors vehicle buyers.
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In a US Securities and Exchange Commission filing, GMAC said the federal government would get 5m preferred shares of GMAC paying 8% interest in exchange for its $5bn capital injection, a US news agency report said.
GMAC said GM would be able to offer financing incentives such as zero percent loans through other lenders for two years with GMAC being added to the choice after that perod. GMAC also won’t have to provide lease financing, from which many providers withdrew after high mid-2008 petrol prices in the US adversely hit most vehicle residual values.
Under a deal effective until November 2016, GMAC had paid GM an annual exclusivity fee and had been required to meet targets for leases and loans, the filing said, according to the report.
GMAC also said the US Treasury would get two seats on an expanded management board if it doesn’t pay interest on its preferred shares for six straight quarters, or more than six non-consecutive quarters.
“These two managers will serve until all accrued and unpaid distributions on the Series D-1 Preferred Interests have been paid in full,” GMAC reportedly said in the filing.
