Only two days ago, Fiat SpA announced that it had obtained an additional 5 percent of Chrysler increasing its stake to 30 percent. Now it seems that the Italian group’s plans are to raise Chrysler ownership to 46 percent by June of this year, according to an Automotive News report. The news site quotes two unnamed insiders with direct knowledge of the matter who talked about Fiat CEO Sergio Marchionne’s plans.
Talks with international investment banks on refinancing Chrysler’s debt with the U.S. and Canadian governments are at an advanced stage, which would allow Fiat to buy a further 16 percent of Chrysler by the end of June, the Italian newspaper Corriere della Sera confirms.
“This is the real goal Sergio Marchionne is working at. He wants to do it by June. He might be able to do it a bit earlier,” the Italian daily reported. However, the move depends heavily on how talks with the banks turn out. Autonews quotes a Fiat source who said “it is technically possible” for Fiat to raise its Chrysler ownership to 46 percent.
Marchionne recently said that Chrysler would refinance its government debt by June. He also confirmed that Fiat wanted to get a majority stake in Chrysler LLC by the end of this year, but did not offer details about how the company plans to achieve this goal.
Chrysler currently owes the U.S. and Canadian governments $7.4 billion (€5.14 billion) from the loans it received in June 2009 when the carmaker came out of bankruptcy protection and Fiat took control over management. If Fiat wants to increase its Chrysler stake to 46 percent, the U.S. automaker must reduce its debt to below $4 billion, according to Chrysler’s April 6 filing with the U.S. Security and Exchange Commission. In addition, the Detroit-based company must fully pay off the government loans before Fiat can take a majority stake.
By Dan Mihalascu
Source: Autonews
PHOTO GALLERY
