Snappy newsletters. Simple Facebook sharing. Spirited comments. Sweet features are waiting… GET THEM NOW!

Treasury Ups Offer to Chrysler Lenders

Treasury blinks in standoff that will determine auto maker's future

By Rob Quinn,  Newser Staff

Posted Apr 23, 2009 1:58 AM CDT
Email

(Newser) – The Treasury Department is offering banks holding Chrysler's debt a better deal in the latest round of the back-and-forth over the automaker's future, the Wall Street Journal reports. The counter offer—still way short of what the banks seek—proposes to give lenders 22% of the $6.9 billion Chrysler owes, plus a 5% stake in company.

The banks—which demanded 40% equity and payment of 65% of the debt after the Treasury earlier offered 15% payment and zero equity—have yet to comment on the new proposal. Chrysler is likely to go into liquidation if a debt deal can't be finalized by the April 30 deadline. Treasury and the lenders, still $3 billion apart, are expected to keep haggling until the last minute.

The government's latest proposals offers Chrysler's lenders a stake in the auto maker for the first time, but only 5% instead of the 40% demanded.
The government's latest proposals offers Chrysler's lenders a stake in the auto maker for the first time, but only 5% instead of the 40% demanded.   (AP Photo/The Canadian Press, Frank Gunn)
The government's counteroffer did not address lenders' demand that Fiat put $1 billion into a proposed alliance with Chrysler.
The government's counteroffer did not address lenders' demand that Fiat put $1 billion into a proposed alliance with Chrysler.   (AP Photo/Joerg Sarbach, File)
The back-and-forth over Chrysler's debt is intensifying as the April 30 deadline approaches.
The back-and-forth over Chrysler's debt is intensifying as the April 30 deadline approaches.   (AP Photo/David Zalubowski, file)
« Prev« Prev | Next »Next » Slideshow
To report an error on this story, notify our editors.
A snapshot of the day's best news stories.
 
COMMENTS
Be the first to comment on this story.

Auto task force makes concessions to lenders
Detroit Free Press

Fiat denies Chrysler deal imminent
Reuters

 
Chrysler • Citigroup • Morgan Stanley • Treasury Department • auto industry • JPMorgan Chase • auto bailout

More Newser Stories

Banks, Treasury Play Chicken on Chrysler Deal

Bailed-Out Banks Don't Want to Bail Out Chrysler

Chrysler Gets New Aid, but End May Loom

Treasury Seeks Bankruptcy Financing for GM, Chrysler

Chrysler's Loan Arm Gets $1.5B Federal Loan
NEWS FROM OUR PARTNERS
Other Sites We Like:   24/7 Wall St.   |   Betty Confidential   |   BuzzFeed   |   Cracked   |   Fark   |   Timelines   |   The Frisky   |   Geek Sugar   |   NewsOne