Chrysler lenders make new debt restructuring offer

By Jui Chakravorty Das and Poornima Gupta

NEW YORK/DETROIT (Reuters) - Chrysler LLC's lenders offered to cut the amount they are owed in a proposal to the Obama administration that points to an acceleration in the pace of high-stakes debt restructuring talks, according to two people with direct knowledge of the proposal.

Chrysler's lenders are owed almost $7 billion and face pressure to accept a reduced amount of debt and equity in a restructured automaker ahead of an April 30 deadline for Chrysler to clinch an alliance with Italy's Fiat SpA (FIA.MI).

In their second offer to U.S. officials, which was delivered on Friday, Chrysler's lenders are seeking $3.75 billion in debt and a 40 percent equity stake, according to one of the people who asked not to be named because of the confidential nature of the talks.

The offer represents a $750 million concession compared with the $4.5 billion in remaining debt the Chrysler creditors had asked for earlier this week.

In other concessions, the lenders dropped requests that Fiat invest another $1 billion in Chrysler and that they be given $1 billion in preferred equity in the automaker, one the people with knowledge of the proposal said.

Earlier this week, U.S. Treasury officials offered the Chrysler lenders $1.5 billion in first-lien debt and a 5 percent equity stake.

Representatives of Chrysler and the U.S. Treasury could not be immediately reached for comment.

U.S. officials argued the earlier request from the banks was unreasonable given the trading levels for Chrysler's debt and the most recent estimates of what the lenders could look to recover in bankruptcy, the second source said.