The latest debt reduction offer by Chrysler LLC’s lenders is unacceptable because it would yield the lenders an unjustified return, an Obama administration official said.
“It is neither in the interest of Chrysler’s senior lenders nor the country for them to advance a proposal that would yield them an unjustified return as Chrysler, its employees and other stakeholders are working tirelessly to help this company restructure,” the official said.
“Our hope and expectation is that these lenders take a more constructive position in the coming days that reflects the actual situation that they and the company face,” the official added. The official spoke on condition of anonymity due to a lack of authority to speak publicly on the issue.
Chrysler’s first-lien lenders have offered to take equity in a restructured automaker allied with Fiat SpA in exchange for writing off about 35 percent of the $7 billion they are owed, according to people with knowledge of the closed-door talks.