U.S. boosts offer to Chrysler lenders - reports
The Treasury Department is said to be proposing that lenders now get paid 22% of the $6.9 billion they are owed.
LONDON (CNNMoney.com) -- The U.S. Treasury has increased its offer to Chrysler's lenders in a bid to lower the automaker's debt ahead of its restructuring deadline, according to published reports.
Under the new proposal, lenders would receive about 22% of the $6.9 billion they are owed. They would also receive a 5% equity stake in the restructured automaker, the Wall Street Journal and New York Times reported.
The Treasury Department had earlier offered Chrysler's lenders -- which include Citigroup (C, Fortune 500) and JPMorgan Chase (JPM, Fortune 500) -- just 15% of what they are owed, the reports said.
But a gulf still exists between the lenders and the Treasury, as lenders are seeking to get paid about 65% of the debt and want a roughly 40% stake, the reports said.
The Obama administration has given Chrysler until April 30 to complete an alliance with Italian automaker Fiat and reach agreements with its lenders and auto unions. If it doesn't succeed, the automaker faces bankruptcy. 
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