Chrysler LLC's first-lien lenders are preparing a counter-offer for the U.S. Treasury that might include equity in a Chrysler-Fiat alliance and some cash in exchange for abandoning their claim to some $7 billion in debt, sources with knowledge of the matter said.
The Chrysler lenders are considering a response after being briefed on key issues in the struggling automaker's turnaround plans, including the proposed capital structure of an alliance between Chrysler
That information was provided to the Chrysler creditors on Sunday, about two weeks after the creditors rejected a government request to write off $6 billion of the amount they are owed, the sources said.
The sources, who declined to be identified because the talks are confidential, said the counter-offer could come in a few days.
The lending banks include JPMorgan Chase & Co
(Editing by Brian Moss)