'This initial loan will allow the company to continue an orderly restructuring,' Chrysler Chief Executive Bob Nardelli said in a statement.

Chrysler later said its statement that talks continue between the US Treasury Department and Chrysler Financial about a loan should have been omitted from its initial press release. A second statement omitted any reference to Chrysler Financial, the financing arm of the carmaker.

The earlier Chrysler press release said controlling shareholder Cerberus Capital Management LP had told Chrysler that productive discussions continue and a loan closing was expected in due course.

'It's inappropriate for us to comment about Chrysler Financial because we are separate companies,' spokesman Shawn Morgan told Reuters.

General Motors Corp received US$4 billion in emergency loans on Dec 31. Both Chrysler and GM have said they need the government cash to meet payouts to suppliers at a time when a plunge in auto sales has drained their cash holdings.

Under terms of the government bailout, Chrysler and GM will have to submit restructuring plans by mid-February and demonstrate that they are viable by the end of March. -- REUTERS