Before 2013, Chrysler Group LLC may repay its Canadian and U.S. government loans. Such a move will allow Fiat S.p.A. to take a 51 percent share in Chrysler. Fiat currently holds 20 percent of Chrysler. On Sept. 16, 2010, Fiat-Chrysler CEO Sergio Marchionne says he may take Chrysler public in the second half of 2011.
Fiat wants to increase its 20 percent stake to 35 percent in 2011 by achieving goals outlined in the Auburn Hills, Michigan-based Chrysler's restructuring in 2009.
Marchionne says he also wants to improve Chrysler's capital structure before the initial public offering and that it may include refinancing Chrysler's U.S. and Canadian government loans, which have effective interest rates as high as 20 percent.
He says that interest payments have kept the company from posting a net income. The face value of Chrysler's debts to the U.S. and Canadian governments is about $7.46 billion.
According to Chrysler's third-quarter financial statements, some of its government loans mature by the end of 2011 while the majority mature in 2017. Fiat rose as much as EUR0.41, or 3 percent, to EUR13.98 and was up 2.7 percent as of 11:57 CET in Milan trading.
The stock has gained 36 percent in 2010, valuing the Turin-based carmaker at EUR16.7 billion ($22 billion). [via autonews - sub. required]