Chrysler LLC has told US dealers reports of its financial distress were unfounded, Automotive News reported on Thursday, citing a letter from company executives, Reuters reported.
"Speculation has surfaced recently in media coverage of analyst reports suggesting Chrysler might have liquidity issues down the road if the US market does not pick up," Jim Press, Chrysler co-president, and Steven Landry, executive vice president of North American sales said in a letter to dealers on Tuesday.
"Chrysler has communicated to the media that the suggestion of a possible bankruptcy situation is without merit," according to the letter cited by Automotive News.
A Chrysler representative could not be reached immediately for comment.
Chrysler, which was bought by private equity firm Cerberus Capital Management about a year ago, was responding to widespread concern about its liquidity position.
Chrysler drew down a $2 billion credit line late last month from Cerberus and Daimler AG, the German car maker that sold a roughly 80 percent stake in Chrysler to Cerberus.
Chrysler's executives quoted Cerberus managing director Lenard Tessler, who said the loan "was not something that was a result of Chrysler having any need for incremental cash based on financial performance of the business."
Tessler said that in a presentation to the national dealer council on June 27, according to Automotive News.
Chrysler, which lost $1.6 billion in 2007, has said it ended the year with $9 billion in cash. Its US sales are down 22 percent so far this year.