US: Chrysler reduces DIP financing
The US Treasury last night said Chrysler, which filed for Chapter 11 bankruptcy protection on 30 April, had now reduced the amount of debtor-in-possession financing to US$3.034bn from $3.340bn.
Chrysler earlier this week won interim approval from the US bankruptcy court in New York to access a US$4.5bn loan as it tried to move ahead in its planned alliance with Fiat. A bankruptcy judge approved Chrysler's request to access the funds from US and Canadian governments, known as debtor-in-possession financing, as well as requests for the company to pay essential suppliers, dealers and its taxes
The Treasury last night said the drop in financing was attributed to to cash the automaker was able to contribute to the debtor-in-possession financing, Reuters reported. The total amount of the debtor-in-possession credit facility was also reduced to US$4.1bn from $4.5bn, the department added.
The Treasury said the reduction in the total DIP credit facility was due to funding from Canada.
Chrysler had also asked the court on Monday for a swift hearing into its planned sale of its best assets into a new company owned by its union, Fiat and the government, eliciting immediate objections from some dissenting secured lenders.