Court okays Chrysler payments to dealers and suppliers
Judge Arthur Gonzales approved $4.6 billion in debtor-in-possession financing allowing Chrysler to pay its dealers and suppliers and to give Chrysler time to finalize its alliance with Fiat.
The U.S. Treasury will supply $4.1 billion of the funding with another $400 million coming from New York banks that already banks hold about $4 billion in Chrysler debt. The balance will be realized from the sale of inventory on hand at Mopar.
Chrysler will use $1.49 billion to pay suppliers for components delivered ahead of the automaker’s bankruptcy filing. That will cover the majority of the $1,71 billion currently owed. An additional $753 million will be used to pay for sales incentives owed to dealers for sales prior the filing.
A minority group of investors, accounting for about $3 billion in Chrysler debt, strongly opposed the decision claiming the company’s net worth would be diminished if the alliance fails to be sealed.
Like on Facebook • Tags: Alliances, bankruptcy, banks, Chrysler, Fiat.
