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Chrysler talks break down

2009-04-30 06:53

Detroit - Talks between the US Treasury Department and Chrysler LLC lenders aimed at cutting the carmaker's debt and keeping it out of bankruptcy broke down late on Wednesday, the Wall Street Journal reported, citing people familiar with the discussions.

The collapse of talks make it all but certain that Chrysler - 80% controlled by private-equity firm Cerberus Capital Management LP - will file for bankruptcy, the WSJ said, citing those sources.

According to people familiar with the matter, the talks broke down despite a revised offer from the Treasury of $2.25 billion to forgive $6.9 billion in Chrysler debt, up from its previous proposal of $2 billion, the WSJ said.

Chrysler has until the end of the day on April 30 to slash its labour and debt costs, and consummate an alliance with Italian carmaker Fiat SpA.

Failure to do so means further emergency government aid for Chrysler will be withheld.

Read more on:    detroit  |  usd

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