New Sasol GTC cars set for thrills

The iconic Grand Prix Circuit will present a new challenge to the GTC drivers as they tackle the country’s fastest racetrack on June 16.

Suzuki’s new Swift hatch and sedan in SA

Suzuki kicks off its new model assault with an all new Swift hatchback and standalone sedan called the Dzire.

Tough tie-up for Chrysler, Fiat

2009-03-31 14:37

The task force wants Chrysler, Fiat and the United Auto Workers to reach deeper concessions than outlined in Chrysler's original emergency government loans and for Chrysler to rework its balance sheet, all in the next month.

Should Chrysler's efforts succeed, the U.S. administration would consider $6 billion of additional investment.

Chrysler has a $6.8 billion first-lien debt with banks led by JP Morgan. It also has $1.5 billion of second lien debt held by Daimler AG and $500 million of second lien debt held by Cerberus Capital Management, which control 19.9 and 80.1% of Chrysler respectively.

"We believe that is way beyond, way beyond, what Chrysler can sustain," said a senior administration official who asked not to be named in discussing details of the panel's closed-door deliberations.

Cerberus has offered to give up all of its equity in Chrysler, which has been written down. Officials also indicate that Cerberus faces pressure to give up a claim to the second lien term loan, which it had proposed to convert to equity.

Fiat chief executive Sergio Marchionne had said at a news conference on Friday that final terms of the partnership would end up being dictated by the US authorities. He said Monday that talks with the auto task force had been "tough but fair."

Analysts said Fiat likely would have to spend some money on Chrysler, with bankers or bondholders eventually seeking some sort of guarantees from the healthier of the two, Fiat.

That is a worrying prospect for Fiat investors because the Italian automaker has already seen its debt rating cut to junk on concern about its deteriorating financial position.


There are new stories on the homepage. Click here to see them.