Banks postpone Chrysler funding plan |
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Wed, 25 Jul 2007 17:10
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NEW YORK (AP) - The group of Wall Street banks raising funds for the turnaround of Chrysler Group postponed a $12 billion debt offer after investors balked at terms on the deal, two people familiar with the matter said Wednesday.The banks, which include Goldman Sachs Group Inc. and JPMorgan Chase & Co., will instead fund the bulk of that debt from their own pockets. Cerberus Capital Management -- Chrysler's buyer -- and Germany's DaimlerChrysler AG -- its seller -- will fund the balance, said the people, who could not comment on the record because they were not authorized to speak publicly.The move had been expected by Wall Street, as investors have become more reticent to buy into deals because of woes in the home-mortgage market and less demand for high-yield debt.Cerberus plans to raise about $62 billion in total as part of a plan to recapitalize Chrysler and refinance old debt.A spokesman for Cerberus would not comment about the new financing plan, but said the acquisition of an 80 percent stake in Chrysler Group is still on track to close in the coming days.Bankers have had a better time raising about $6 billion in loans for Chrysler's finance unit, according to people familiar with the matter who were not authorized to speak publicly on that deal. Though terms had to be sweetened, that financing -- along with the $12 billion raised by the banks, Cerberus and DaimlerChrysler -- is expected to close on Aug. 3.Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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Chrysler deal to close, banks seek funds 