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US Treasury lends GM a further $2 billion

Latest update : 2009-04-24

The US Treasury has announced that it has lent an additional $2 billion dollars to General Motors to help it operate until June 1, by which date it has to submit a new restructuring plan. The Treasury has not yet provided fresh aid to Chrysler.

AFP - The US Treasury Friday announced it had loaned General Motors an additional two billion dollars to help the troubled auto giant operate until a June 1 deadline for submitting a new restructuring plan.

The government said earlier in the week that it would provide GM with five billion dollars and give competitor Chrysler 500 million dollars while the two loss-making firms came up with plans to return to profitability.

The Treasury has yet to provide any new money to Chrysler, which is due to submit its restructuring proposals to the government by May 1.

Authorities have warned that bankruptcy was an option for both companies if they failed to come up with realistic plans for becoming "viable" by the deadlines.

GM, which had already received 13.4 billion dollars in loans from the government, was given 60 days to present an aggressive restructuring plan after authorities rejected previous proposals from the firm in late March.

Chrysler, considered the most fragile of the big US automakers, has received four billion dollars in loans. US media reported this week that the Treasury was pressing the company to prepare to file for bankruptcy as early as next week when its deadline to provide a realistic survival plan expires.

Date created : 2009-04-24