SECURED LENDERS of US motor group Chrysler have dropped their opposition to the sale in bankruptcy of the company to Fiat, a lawyer representing the group said yesterday.
The group, calling itself Chrysler's Non-Tarp lenders, doesn't plan to defend earlier objections and may withdraw them formally, said the White & Case attorney representing the group.
About 20 senior lenders, led by OppenheimerFunds and Stairway Capital, had also sought to block Chrysler's plans for a sale of its best assets into a new firm owned by its union, Fiat and the government.
However, about 62 per cent of the lenders, holding 90 per cent of the $6.9 billion loan, agreed to take the $2 billion in cash to extinguish their claim. The holdouts represented by White & Case didn't yield to a higher offer of $2.25 billion at the end of April, and Chrysler was put into bankruptcy the next day.
Stairway Capital also announced its withdrawal from fighting the sale.
"Given the reduced number of senior creditors willing to continue to pursue an alternative to the federal automotive taskforce's proposed settlement, OppenheimerFunds has determined that the senior creditors can no longer reasonably expect to increase the recovery rate on the debt they hold by opposing the taskforce's restructuring plan," OppenheimerFunds said.
The fund said it was now willing to adhere to the determinations of a United States Bankruptcy Court. - (Reuters/Bloomberg)
