Chrysler files for Chapter 11 bankruptcy
Thursday 30th April, 2009
Ending months of unmcertainty about its immediate future, Chrysler went bankrupt Thursday.
The move is seen more as a strategic one, to allow the crippled automaker to reorganize and emerge as a stronger, profitable and viable company.
Last minute efforts to save the company from becoming the first major automaker to go bankrupt failed when a small number of hedge funds failed to agree to terms to discount their debt.
The majority of Chrysler's loans, 70%, are owned by leading banks which had agreed to terms. The hedge funds were holding out for a better offer which didn't come.
U.S. President Barack Obama said the bankruptcy measure would allow the company to directly maintain 30,000 jobs, and indirectly, through dealerships and suppliers, maintain hundreds of thousands more. He has pledged $8 billion in government assistance to support Chrysler through the bankruptcy process.
As anticipated Chrysler, at the same time as entering bankruptcy, has reached an agreement with Italian carmaker Fiat SpA, whereby that company will take an immediate stake of 20% in Chrysler, which may increase to as high as 35%.
Workers pension funds will end up with about 55% of the restructured Chrysler.
Thursday 30th April, 2009
Ending months of unmcertainty about its immediate future, Chrysler went bankrupt Thursday.
The move is seen more as a strategic one, to allow the crippled automaker to reorganize and emerge as a stronger, profitable and viable company.
Last minute efforts to save the company from becoming the first major automaker to go bankrupt failed when a small number of hedge funds failed to agree to terms to discount their debt.
The majority of Chrysler's loans, 70%, are owned by leading banks which had agreed to terms. The hedge funds were holding out for a better offer which didn't come.
U.S. President Barack Obama said the bankruptcy measure would allow the company to directly maintain 30,000 jobs, and indirectly, through dealerships and suppliers, maintain hundreds of thousands more. He has pledged $8 billion in government assistance to support Chrysler through the bankruptcy process.
As anticipated Chrysler, at the same time as entering bankruptcy, has reached an agreement with Italian carmaker Fiat SpA, whereby that company will take an immediate stake of 20% in Chrysler, which may increase to as high as 35%.
Workers pension funds will end up with about 55% of the restructured Chrysler.
