Chrysler bankruptcy looms despite deal
Chrysler’s biggest lenders and the U.S. government reached a breakthrough framework deal to cut the automaker’s debt by $6.9 billion, but officials say bankruptcy is still a strong possibility with the Obama administration’s Thursday deadline for a comprehensive rescue plan just hours away.
Fiat Chief Executive Sergio Marchionne was quoted by the president of the Canadian Auto Workers union as saying Chrysler would likely enter Chapter 11 bankruptcy for a period of time. But Michigan Senator Carl Levin said, “If they do go into bankruptcy, it would really be in and out.” A source with senior-level knowledge of the restructuring told us that a surgical bankruptcy could be a way, for instance, to address “recalcitrant” lenders.
With Germany’s Daimler AG dumping its 19.9 percent stake in Chrysler and Italy’s Fiat poised to “eventually” own more than a third of the company, European know-how and innovation have never been more important for the U.S. auto industry.
Deals of the Day:
* British education and training company BPP Holdings said it had received a preliminary approach from Apollo Global at 620 pence per share in cash. The approach was at a 70 percent premium to BPP’s closing price on Tuesday valued BPP at 303.5 million pounds ($447 million).
* Australian iron ore miner Fortescue Metals has completed approvals for its equity tie-up with China’s Hunan Valin Iron and Steel Group, the company said.
* Russia’s Aeroflot may agree to buy 49 percent of troubled German airline Blue Wings, Russian Transport Minister Igor Levitin, who is also Aeroflot’s chairman, told Reuters.
* A merger between Shinsei Bank and Aozora Bank is facing difficulties as they were not able to get consent from their major shareholders, Jiji news agency reported.
(PHOTO: A Chrysler logo is seen atop a New York City car dealership April 27, 2009. REUTERS/Mike Segar)