Chrysler Denies Bankruptcy Rumours [View All]

[Purveyor]

Reuters news Agency

DETROIT–A spokesman for Chrysler LLC Thursday said market rumours of a bankruptcy filing by the privately held automaker were "without merit," saying the company had ample liquidity.

"The rumour is without merit," Chrysler spokesman Dave Elshoff said. "There is no basis for the rumour."

The concern about Chrysler's liquidity position and the rumour of a Chapter 11 filing drove down prices for the automaker's loans Thursday, according to Reuters LPC.

Fitch Ratings Wednesday cut ratings for both Chrysler, now controlled by Cerberus Capital Management, and its larger rival General Motors Corp, citing the industrywide downturn in sales.

A spokesman for Cerberus also said there was no truth to the market rumour of a bankruptcy filing.

Liquidity concerns for U.S. automakers have been rising as evidence grows that the downturn in sales that began earlier this year accelerated in June in the face of record gas prices and a consumer defection from trucks and SUVs.

Earlier this week, Chrysler drew down a $2 billion (U.S.) credit line from Cerberus and Daimler AG, the German ca maker that sold off a roughly 80 per cent stake in Chrysler to Cerberus last year.


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