Chrysler 2013 Annual Report Download - page 42

41
Report on
Operations
These restrictive covenants could have an adverse effect on the Group’s business by limiting its ability to take advantage of financing, mergers
and acquisitions, joint ventures or other corporate opportunities. In addition, the senior credit facilities contain, and future indebtedness may
contain, other and more restrictive covenants and also prohibit Chrysler from prepaying certain of its indebtedness. The senior credit facilities
require Chrysler to maintain borrowing base collateral coverage and a liquidity threshold. A breach of any of these covenants or restrictions
could result in an event of default on the indebtedness and any of the other indebtedness of Chrysler or result in cross-default under certain
of its indebtedness.
If Chrysler is unable to comply with these covenants, its outstanding indebtedness may become due and payable and creditors may foreclose
on pledged properties. In this case, Chrysler may not be able to repay its debt and it is unlikely that it would be able to borrow sufficient
additional funds. Even if new financing is made available to Chrysler in such circumstances, it may not be available on acceptable terms.
In addition, compliance with certain of these covenants could restrict Chrysler’s ability to take certain actions that its management believes are
in Chrysler’s and Group’s best long-term interests.
Should Chrysler be unable to undertake strategic initiatives due to the covenants provided for by the above instruments, the Group’s business
prospects, financial condition and results of operations could be adversely impacted.