2nd UPDATE: Canada Government Mulls DIP Financing For Chrysler, GM
23 April 2009 - 11:46PM
Dow Jones News
The Canadian government is considering the possibility of
extending debtor-in-possession financing to Chrysler LLC and
General Motors Corp. if they seek bankruptcy protection, Industry
Minister Tony Clement said Thursday.
"Of course we are, yes," Clement told reporters after question
period in the House of Commons.
He said a company that's restructuring under bankruptcy
protection needs to have a financier for debtor-in-possession
funding. He said it's "pretty clear" that banks won't be the
financiers, so there's a suggestion that U.S., Canadian and Ontario
governments should take on the role.
"That is a bridge that we have not crossed yet. But obviously we
are looking at all the permutations and combinations," he said.
He also said Chrysler and the Canadian Auto Workers have made
progress on talks for the labor union to make concessions on
pay.
"We are pleased that progress is being made. They are still
working hard at it," he said.
He said many other pieces must fall into place for a
restructuring plan that goes far enough to qualify for government
aid, so he's sticking with the month-end deadline to announce what
the "go-forward" plan would be. He said he gets updates almost
every hour on how things are unfolding.
"That's why I think we should concentrate on the April 30th date
as the most probable and reasonable to get all of this together or
not," he said.
In an e-mailed statement, Chrysler reiterated that its viability
will be enhanced through an alliance with Fiat as it would expand
its global competitiveness.
"As we move forward in this process, we believe it's important
to keep all options open," the statement said. "Chrysler will
continue to work through the end of the month, based on the
direction given by the Presidential Auto Task Force, to secure the
support of the necessary stakeholders and reach a successful
conclusion that the Administration and U.S. Treasury deems
appropriate."
A CAW spokesman said negotiations with Chrysler are
progressing.
-Nirmala Menon, Dow Jones Newswires; 613-237-0668;
nirmala.menon@dowjones.com
(Andy Georgiades contributed to this article.)