General Motors Corp is expected to report a deep loss on Thursday for the first quarter in its last earnings report before the deadline for a restructuring that would wipe out current shareholders.

GM is facing a government-imposed June 1 deadline to reach agreements to overhaul its operations and cut more than $40 billion in debt.

GM said in a statement on its website that global vehicle sales fell 28 percent in the first quarter, led by a 47 percent decline in North America.

The quarter also coincided with GM's failure to win new federal backing for a turnaround plan that the Obama administration's auto's task force concluded was too slow-moving and too cautious to succeed.

In its punishing first quarter, the Obama administration ousted former Chief Executive Rick Wagoner.

Analysts, on average, expect GM to post a first-quarter loss of $11.05 per share before items, far wider than the 62 cent per share loss a year earlier,

Revenue is expected to fall by about half to $21 billion, according to Reuters Estimates, which reflects sharply lower production.

Creditors are looking beyond GM's results, focusing on whether it succeeds in winning debt concessions from its bondholders and the United Auto Workers union, analysts said.

Absent those concessions, GM Chief Executive Fritz Henderson, who assumed that job a month ago, has said the automaker will file for bankruptcy.

Even if GM clinches debt restructuring deals, the automaker said this week it could issue up to 60 billion new shares to pay off its debt to the government, bondholders and the UAW.

That flood of new shares would leave current GM investors with 1 percent of the restructured company and take the value of the stock to less than 2 cents.

GM shares, a component of the Dow Jones Industrial Average, ended trade on Wednesday at $1.66, down 10.3 percent.

NO RECOVERY FOR SHAREHOLDERS

We would like to see actions that will ultimately position GM to be a smaller but profitable automaker along with details on how it will achieve this, S&P equity analyst Efraim Levy said in a statement. Unfortunately for GM current shareholders, we do not expect them to meaningfully share in any recovery.

GM was able to keep operating in the first quarter with $13.4 billion in aid from the Bush administration.

In April, the automaker drew another $2 billion and has said it would expect to need another $2.6 billion from the U.S. Treasury before the June 1 deadline. That would take GM's debt to the U.S. government to $18 billion.

GM has asked its three major creditor groups to write off at least $43 billion in debt in exchange for ownership stakes in a restructured company.

GM bondholders, who are owed $27 billion, have also been offered new stock in exchange for writing off debt in a bond exchange the automaker launched last week.

GM is targeting a reduction of at least $24 billion, or 90 percent, of its bond debt under the plan and has warned that it could be forced into bankruptcy if that cannot be achieved.

Barclays Capital analyst Brian Johnson said the success of GM's smaller rival Chrysler LLC in winning approval to sell most of its assets out of bankruptcy quickly made it more likely that GM would follow it into court protection.

Obama administration officials have pledged that bankruptcy proceedings for both Chrysler and GM would be completed within 60 days, a process they have compared to a quick rinse of liabilities.

Judge Arthur Gonzalez, who is overseeing Chrysler's bankruptcy case, on Tuesday ruled that the government's plan could proceed over the objections of some creditors.

The ruling likely means that 'New Chrysler' can emerge in 60 days, making a similar 'quick rinse' for GM bondholders appear more likely in our view, Barclays' Johnson said in a note to clients on Wednesday.

(Reporting by Kevin Krolicki; Editing by Toni Reinhold)

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