Chrysler Dodge

29 April 2009 By Lauren Silva

With banks holding 70% of Chrysler s secured debt agreeing to the Treasury s 30 cents on the dollar offer, the reorganisation can move ahead. Of course, with the other 40 lenders still willing to fight, it means Chrysler is hardpressed to avoid bankruptcy.

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The Treasury Department has told Chrysler's secured lenders that they need to accept $2bn in exchange for their $6.9bn loan by Thursday. JPMorgan, Citigroup, Goldman Sachs, and Morgan Stanley, the four largest banks holding 70% of the debt, have agreed to the deal.

The United Auto Workers union's retiree healthcare fund will own 55% of Chrysler in exchange for cutting in half the automaker's $10.6bn cash obligation to the group, according to Bloomberg. The US Treasury will also give up to 35% of equity to Fiat and the Treasury will keep 10%.

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