The company has outlined the first steps to be taken in order to swap their debt for cash payments. Its lenders seem to have agreed to cut the $6.9 billion debt in exchange for a $2 billion cash payment and no equity in a new company. Nevertheless, bankruptcy is still possible (we would say even likely, if the lenders have indeed agreed to the swap).
"We don't want to prejudge the outcome. There is still someway to go in the negotiations, so I would not rule anything in or out," White House spokesman Robert Gibbs was quoted as saying by Reuters after the administration confirmed the deal with most of Chrysler's debtholders.
Officially, no comment has come from neither Chrysler nor the lenders. This doesn't mean the lenders shouldn't take the deal. Gary Peters, US Representative from Michigan, hinted to the bankruptcy we think the company is heading towards: "The remaining debt holders should understand that this deal is better than what they could expect in bankruptcy," he said.
As for the other obstacle Chrysler has to overcome, the UAW, the two sides seem to have reached an agreement. According to inside sources, the UAW agreed to the measures proposed by the manufacturer in exchange for a 55 percent hold in the future company.
All these talks and rumors will be concluded tomorrow, when the deadline set by the US government is met.
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