GMAC at the brink

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GMAC at the brink
« Thread Started on Dec 10, 2008, 8:02am »

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GMAC at the brink
Posted: 09:33 AM ET
By Chris Isidore
CNNMoney.com senior writer
NEW YORK (CNNMoney.com) — GMAC Financial Services, the finance unit tied
to automaker General Motors, said Wednesday it is coming up well short in its
efforts to raise the capital it needs to become a bank holding company, a move
the unit is counting on to gain access to needed funds from the Treasury
Department and Federal Reserve.

The unit, which is 49 percent owned by General Motors and 51 percent
owned by private equity firm Cerberus Capital Management, had applied to become
a bank holding company last month but warned Wednesday that it may have to pull
the application.

The looming failure is another blow to embattled automaker GM.
GMAC needs to raise $30 billion from investors holding its notes to meet
the Fed’s capital requirements but the firm said Wednesday it was struggling to
get those investors to agree to exchange their bonds for new notes and
preferred stock.