Talks fail, Chrysler bankruptcy imminent: ReportApril 30th, 2009 - 2:08 pm ICT by IANS
Washington, April 30 (DPA) Talks aimed at saving the ailing US carmaker Chrysler LLC from bankruptcy failed late Wednesday, making the company filing for court protection “all but certain”, the Wall Street Journal said in its online edition.
The US government now expects to get the company through its bankruptcy-filing process quickly to pave the way for a takeover by Italian carmaker Fiat SPA, the paper wrote, quoting administration sources.
The talks between the US Treasury Department and lenders broke down after the government’s automotive task force tried to persuade several hedge funds and other lenders to accept a deal to lower Chrysler’s debt.
Chrysler is indebted to about 45 banks and hedge funds for $6.9 billion. The government wanted to lower those liabilities to about $2.25 billion, the Journal said.
Administration officials have been preparing for a possible bankruptcy for weeks. While Fiat is willing to enter an alliance with Chrysler and also acquire a majority stake at some point, the Italian carmaker is reluctant to invest in Chrysler.
Therefore, a filing for Chapter 11 bankruptcy protection was regarded as a necessary step to facilitate a Fiat takeover.
US President Barack Obama earlier Wednesday still expressed hope that bankruptcy could be avoided.
Tags: administration officials, administration sources, bankruptcy filing, barack obama, chapter 11 bankruptcy, chapter 11 bankruptcy protection, chrysler, dpa, fiat, fiat spa, fiat takeover, hedge funds, italian carmaker, liabilities, majority stake, necessary step, treasury department, us government, us treasury department, wall street journal