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Chrysler approaches key deadline

by brain teaser | 3 years ago

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silver spoon

Chrysler is just hours away from a deadline that could force it to file for bankruptcy protection. Continuing efforts to restructure the business focus on persuading its main lenders to write off its debts, but reports say these talks have stalled. Chrysler is also continuing discussions to form an alliance with Fiat, another key demand of the US government. President Barack Obama said Chrysler could emerge stronger afterwards if a bankruptcy filing proved necessary. "It would be a very quick type of bankruptcy and they could continue operating and emerge on the other side in a much stronger position," he said. Government assistance The US government has told the carmaker it would be given a further $6bn (£4bn) of vital state loans if the restructuring is completed by 30 April. It gives US businesses time to rearrange their finances while continuing to trade, protected from their creditors So far Chrysler has managed to persuade its main union to back the restructuring and agree a cost-cutting deal. The sticking point remains whether the carmaker can persuade its main lenders to accept $2bn in cash in exchange for writing off all of Chrysler's $6.9bn secured debt. The company, the smallest of the US "Big Three" carmakers after General Motors (GM) and Ford, secured a $4bn loan from the US government in January, and has since gained $500m more. GM has also received multi-billion government loans. While Ford has yet to require any money, the government has agreed to give it financial support, should it be needed. All three firms have seen sales slump in their home market as the recession has intensified.
Report (0) (0) | 3 years ago