Chrysler lenders make counteroffer to Treasury

DETROIT: Chrysler's first-lien lenders made a new offer to the US Treasury on Friday, less than a week before a government-imposed deadline for the struggling automaker to complete restructuring deals, a source briefed on the discussions told Reuters.

Terms of the new proposal were not immediately available. Chrysler, about 80 per cent controlled by Cerberus Capital Management, has until the end of April to reach deals to cut its debt and labor costs and cement an alliance with Italy's Fiat SpA.

The US Treasury on Wednesday offered the lenders $1.5 billion and a 5 per cent equity stake in a restructured Chrysler in exchange for about $7 billion of debt they now hold.

The lenders had initially offered to retain about $4.5 billion in debt and take a 40 per cent stake in a new Chrysler supported by government investment and the Fiat deal.