Fiat can raise Chrysler stake
By Deepa Seetharaman |
May 11, 2011, Wednesday
|
Print Edition
Print Edition
ITALIAN automaker Fiat SpA can boost its stake in Chrysler Group LLC to more than 70 percent using an array of options, including buying the United States Treasury's stake.
Fiat can buy the Treasury's stake within 12 months of repaying loans it owes the US government that stem from its 2009 bailout, Chrysler said on Monday in a filing with the US Securities and Exchange Commission.
Chrysler owes about US$7.5 billion in loans to the US and Canada and the US automaker intends to repay the loans by the end of June, the company said last month.
As part of Chrysler's 2009 bailout deal, the US Treasury gave Fiat management control and a 20-percent stake in Chrysler. Treasury officials laid out a series of tests and options that allowed Fiat to increase its stake to 51 percent.
Fiat now has a 30 percent stake in Chrysler after meeting two tests earlier this year. After the refinancing deal, its stake will soar to 46 percent.
The 2009 agreement left open the possibility for Fiat to increase its stake in Chrysler beyond 51 percent.
The US Treasury currently has 8.6 percent of Chrysler, while the healthcare trust affiliated with the United Auto Workers union holds a 59.2 percent stake.
Fiat can buy the Treasury's stake within 12 months of repaying loans it owes the US government that stem from its 2009 bailout, Chrysler said on Monday in a filing with the US Securities and Exchange Commission.
Chrysler owes about US$7.5 billion in loans to the US and Canada and the US automaker intends to repay the loans by the end of June, the company said last month.
As part of Chrysler's 2009 bailout deal, the US Treasury gave Fiat management control and a 20-percent stake in Chrysler. Treasury officials laid out a series of tests and options that allowed Fiat to increase its stake to 51 percent.
Fiat now has a 30 percent stake in Chrysler after meeting two tests earlier this year. After the refinancing deal, its stake will soar to 46 percent.
The 2009 agreement left open the possibility for Fiat to increase its stake in Chrysler beyond 51 percent.
The US Treasury currently has 8.6 percent of Chrysler, while the healthcare trust affiliated with the United Auto Workers union holds a 59.2 percent stake.
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