Chrysler is busily working on a revised viability plan to submit to the Obama administration by April 30th, but an issue with Chrysler’s banks and lenders has brought all progress to a standstill. Chrysler’s lenders – which hold $6.9 billion of debt with the automaker — rejected Chrysler’s proposed plan for restructuring and are currently writing a counter offer.
According to the Associated Press, Chrysler’s original proposal offered lenders 15 cents on the dollar, or roughly $1 billion to erase its $6.9 billion of debt. That offer was viewed as unacceptable, with lenders now drafting a new proposal.
Although it remains to be seen how much Chrysler ’s lenders will seek, the counteroffer will likely include a stake in the Dearborn-based company. Equity in Chrysler would ensure a profitable return should Chrysler successful form an alliance with Italy’s Fiat.
A decision on the counter offer is expected fairly quickly as the Obama administration’s April 30th deadline is quickly approaching. But with lenders now interested in taking part ownership of Chrysler, it sounds as if a deal with Fiat is more likely than ever.
