Auto Task Force Responds to Chrysler's Creditors
President Obama’s automotive task force responded to the counteroffer issued earlier this week by Chrysler’s creditors, bending a little but leaving a sizeable gap between the two parties.
According to an unnamed source familiar with the offer, the task force offered Chrysler’s creditors a 5 percent stake in the Chrysler-Fiat partnership in exchange for slashing Chrysler’s debt from $6.9 billion to $1.5 billion. Previously, the task force had not offered a stake in the partnership and demanded the debt drop to $1 billion.
Earlier this week, the creditors offered to reduce Chrysler’s debt to $4.5 billion in exchange for a 40 percent stake in the Chrysler-Fiat partnership, a seat on the partnership’s board of directors, and a $1 billion cash infusion from Fiat.
Chrysler faces an April 30 deadline to finish talks with its creditors and strike iron out the details of a partnership with Fiat. If it fails to meet this deadline, the U.S. Treasury Department will call back loans it issued to Chrysler in December, forcing bankruptcy on the automaker. As the deadline approaches, talks are bound to heat up in the next six days.
Source: The Detroit Free Press