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Chrysler lenders offer to cut remaining debt – source

Chrysler LLC’s first-lien lenders have offered to cut the amount they are owed to $3.75 billion, moving closer to the position of the US Treasury in high-stakes debt restructuring talks, according to a person with direct knowledge of the proposal.

Chrysler’s lenders are owed almost $7 billion and face pressure to accept a reduced amount and equity in a restructured automaker ahead of a government-imposed April 30 deadline for Chrysler to clinch an alliance with Italy’s Fiat SpA.

In their second offer to US officials, Chrysler’s lenders are seeking $3.75 billion in debt and a 40% equity stake, according to the person who asked not to be named because of the confidential nature of the talks.

The offer represents a $750-million concession compared with the $4.5 billion in remaining debt that the Chrysler creditors had asked for in a debt restructuring proposal submitted to US officials earlier this week. (Reuters)