London, Nov. 30 (PTI): US auto maker General Motors (GM) is in emergency talks with its lenders over a multi-billion-dollar debt-for-equity deal, which can save the company from filing for bankruptcy, The Sunday Times said in a report.

The report said the auto maker’s chief executive Rick Wagoner was scrambling to secure a deal by Tuesday when he would make a fresh attempt to secure up to $12 billion (£7.8 billion) in financial aid from the US government.

According to the publication, Wagoner is trying to persuade some of the debt holders to swap part of GM’s $43-billion debt pile for shares, in a move that will shore up the balance sheet and reduce its crippling interest costs.

GM has been paying nearly $2.9 billion a year as interest payments.

Further, the company has lost about $13 billion in the first nine months of this year because of weak demand and restructuring costs.

“The new capital structure will form the basis of a new business plan for a much smaller, leaner business. If an agreement can be reached this weekend the company can avoid seeking bankruptcy protection,” the report said.