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May 28, 2009

Chrysler's Viper price got no takers

It sought $10 million for business, it says

Chrysler LLC, seeking to sell most of its assets for $2 billion out of bankruptcy to a new company, said it didn't get an offer for the plant that makes the Dodge Viper sports car at the automaker's $10-million price.

The lack of bidders for the Detroit factory shows the limited value of automotive assets in a liquidation, CEO Bob Nardelli said in a U.S. Bankruptcy Court filing in New York. The Viper plant isn't among the assets to be sold to the new company, which would be led by Fiat SpA.

"There is the objector's mistaken notion that it would be a simple matter for us to sell off select product lines, such as Jeep, that might allow a recovery above $2 billion," Nardelli said. "The market for such assets is extremely depressed at this time."

Judge Arthur Gonzalez heard objections to the sale of the assets Wednesday in New York, including those presented by secured lenders that say the plan wouldn't give them a high-enough recovery for their portion of $6.9 billion in loans owed by Chrysler. Gonzalez is being asked to approve the offer from a group including Fiat, a UAW retiree health care trust and the U.S. and Canadian governments.

Chrysler has been trying to sell the Viper business since August. According to a separate bankruptcy filing, the business generated earnings before taxes, interest, depreciation and amortization of $16 million in 2008.

The automaker did receive a $5.5-million offer to buy the Viper business and lease the Detroit plant for a year, according to a bankruptcy filing. Chrysler is trying to verify that the potential buyer, Devon Motor Works, has access to financing, according to the documents.

LINK:Chrysler's Viper price got no takers | | Detroit Free Press
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