U.S. encouraged by Fiat plan for Chrysler

WASHINGTON (Reuters) - The U.S. government is encouraged by the turnaround plan for Chrysler presented by Fiat SpA (FIA.MI) but will not push for a quick offering of the automaker's shares, a senior official said.

"We see management with a huge sense of urgency. We see a huge dedication and commitment, working extremely hard," Ron Bloom, who heads the Obama administration's autos task force told Reuters on Tuesday. "It's an ambitious plan."

The U.S. Treasury directed and funded a restructuring of the No. 3 U.S. automaker in bankruptcy that gave operational control of Chrysler and an initial 20-percent stake to Fiat....More

Chrysler Fiat-U.S. Reaches Deal With Chrysler Banks, Person Says

By John Hughes

April 28 (Bloomberg) -- The U.S. has reached agreement with banks on terms to reduce debt of Chrysler LLC, according to a person with knowledge of the negotiations.

The banks’ representatives agreed to forgo $6.9 billion in debt in return for $2 billion in cash, said the person, who declined to be identified discussing the private talks. The deal is one of the steps Chrysler needed to avoid a bankruptcy after April 30.

Bankruptcy remains a possibility for Chrysler, the person said. All 46 banks involved need to ratify the terms, and it isn’t likely that all would, the person said. In that case, a quick, surgical type of bankruptcy may be needed to bring any dissenting banks into an agreement, the person said.

Chrysler, operating with $4 billion in U.S. loans, faces an April 30 deadline to restructure its costs or risk losing government support.

Shawn Morgan, a Chrysler spokeswoman, declined to comment.