The US Treasury has said it has finalised a $4 bn loan to troubled cash-strapped carmaker Chrysler.
"Treasury today finalised the loan transaction for Chrysler car company and funded the full amount of 4 billion dollars," Brookly McLaughlin, a Treasury spokeswoman, said in a statement yesterday.
Chrysler Chairman and CEO Bob Nardelli said the loan would help the company "bridge the current financial crisis."
"This initial loan will allow the Company to continue an orderly restructuring, while pursuing our vision to build the fuel-efficient, high-quality cars and trucks people want to buy, will enjoy driving and will want to buy again," he added in a statement.
The loan is part of a $13.4 billion rescue package the US government approved in December for General Motors and Chrysler to stave off collapse amid tight credit and dismal sales.
The first segment of the bailout provides four billion dollars each to GM and to Chrysler, the smallest of the Big Three US automakers.
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GM, the largest US automaker, was to receive an additional $5.4 billion dollars in mid-January and would be eligible for a further $4 billion from February pending congressional action. Treasury has also provided six billion dollars in aid to GMAC, GM's financial arm.
Under the agreement, the automakers will have to prove their viability by March 31 or the government could require the funds to be repaid within 30 days.
"The objective of this programme is to prevent a significant disruption of the American automotive industry that poses a systemic risk to financial market stability and will have a negative effect on the real economy of the US," the Treasury said on its website Wednesday.