NYU's Altman sees 50-55 pct chance of GM default

(For other news from the Reuters Restructuring Summit, click here)

By Dena Aubin

NEW YORK, Sept 26 (Reuters) - General Motors Corp GM.N, bruised by multi-billion dollar losses, has a 50 percent to 55 percent chance of defaulting on its debt over the next five years, default expert Edward Altman told the Reuters 2008 Restructuring Summit this week.

A bankruptcy filing may be the best option for GM to protect its assets and further reduce costs, said Altman, professor of finance at New York University's Leonard L. Stern School of Business.

"If we have a global recession, you know autos are going to get hit and get hit hard, not just GM, and it's looking more and more like a global recession," Altman said.

GM spokeswoman Renee Rashid-Merem said, "We've been very clear that bankruptcy is not something that we're considering." She also said the company has a very solid plan in place to bolster liquidity by $15 billion.

GM's Chief Executive Rick Wagoner said on Thursday that September U.S. auto sales were running about flat from August but held out hope that a government loan package, tax breaks and a banking bailout all pending in Congress would help loosen credit and support demand. For details click on [nN25520893].

In a move to shore up reeling automakers, the U.S. House of Representatives on Wednesday approved a measure to provide up to $25 billion in government loans, with Senate passage expected to follow soon. For details click on [nN24453428].