How much government aid will Chrysler receive in return for filing Chapter 11 bankruptcy?
U.S. and Canadian governments plan to give about $15-billion (U.S.) in financing to Chrysler to help keep it operating through bankruptcy protection. Sources say the federal and Ontario governments will provide about $3-billion. This will cover debtor-in-possession financing and exit financing when the beleaguered auto maker emerges from Chapter 11 bankruptcy protection. The governments will hold a 10-per-cent stake in Chrysler, with the Canadian governments’ stake sitting at 2 per cent. It is anticipated Chrysler will file for bankruptcy protection on Friday. Sources: http://www.digitaljournal.
DETROIT – After months of struggling to stay alive on government loans, Chrysler finally succumbed to bankruptcy Thursday, pinning its future on a top-to-bottom reorganization and plans to build cleaner cars through an alliance with Italian automaker Fiat. The nation’s third-largest car manufacturer filed for Chapter 11 bankruptcy protection in New York after a group of creditors defied government pressure to wipe out Chrysler’s debt. The company plans to emerge in as little as 30 days as a leaner, more nimble company, probably with Fiat as the majority owner. In return, the federal government agreed to give Chrysler up to $8 billion in additional aid and to back its warranties. “It’s a partnership that will give Chrysler a chance not only to survive, but to thrive in a global auto industry,” President Barack Obama said from the White House Sources: news.yahoo.
