updated 6/26/2008 3:58:17 PM ET 2008-06-26T19:58:17

A Chrysler LLC spokeswoman says speculation the company plans to file for bankruptcy protection is not true.

The rumors were so prevalent Thursday that the company was forced to issue a statement.

Spokeswoman Shawn Morgan says the speculation is false and without merit. She says they do not reflect the privately owned company's financial situation.

The rumors apparently originated in Europe and follow Tuesday's action by Chrysler to exercise a $2 billion line of credit from Cerberus Capital Management LP and Daimler AG.

Morgan says the Auburn Hills, Michigan-based automaker had to borrow the money before Aug. 3 under terms of Cerberus' purchase of an 80 percent stake in Chrysler from Daimler in August of 2007.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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