October 17, 2008 / 5:04 AM / 10 years ago

Lenders eager for Chrysler-GM deal- WSJ

Oct 17 (Reuters) - Potential lenders are providing strong support for General Motors Corp (GM.N) and Chrysler LLC’s merger talks and are eager to see a deal done, the Wall Street Journal said.

Major banks that have long lent to both companies, such as JPMorgan Chase & Co (JPM.N) are keen to do a deal to help reduce exposure to the auto industry, the paper said.

While lenders like JPMorgan have shown interest in equity in such a GM-Chrysler deal, several other lenders approached by the parties have passed on the deal, the Journal said.

JPMorgan and Citigroup Inc (C.N) are representing Chrysler and its majority owner Cerberus Capital Management [CBS.UL], while Morgan Stanley (MS.N) and Evercore Partners Inc (EVR.N) are representing GM, the paper said citing a person involved in the situation.

A Citigroup spokesman declined to comment.

J.P. Morgan, Evercore and Morgan Stanley could not be immediately reached for comment by Reuters.

Cerberus is talking to GM about a transaction in which GM could buy some of Chrysler’s assets as an alternative to an outright purchase of its smaller rival, sources told Reuters on Thursday. [ID:nN16394740]

GM is set to report dismal third-quarter earnings in coming weeks and is scrambling to find new sources of funding, the paper said citing people familiar with the matter.

That’s spurring GM to complete the deal as soon as the end of October, these people told the paper.

GM did not immediately return a call seeking comment. (Reporting by Ajay Kamalakaran in Bangalore; Editing by Lincoln Feast)

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