The U.S. Treasury Department has reached a tentative agreement with four of Chrysler’s major debt holders in a bid to keep the automaker out of bankruptcy protection.
The four banks will forgo claims to their portion of Chrysler’s $6.9-billion US debt in exchange for $2 billion in cash, two people familiar with the talks said.
The Treasury Department needs to persuade all 46 banks and hedge funds that hold Chrysler debt to go along. That would leave a partnership with Italian automaker Fiat Group as the lone hurdle before tomorrow’s deadline.
A person familiar with the Chrysler-Fiat talks said the Fiat deal is near completion.
