Chrysler plans to repay U.S. and Canadian government loans next week

Article by Christian Andrei, on May 19, 2011

Chrysler intends to repay the debt it owe to the Canadian and U.S. and Canadian governments on May 24, allowing Fiat S.p.A. to increase its ownership in Chrysler by 16 percent, two people who are familiar with the scenario said.

The company has been marketing as much as $7.5 billion of debt in order to repay the U.S. and Canadian governments for loans that were obtained as part of its bankruptcy restructuring in 2009.

Last month, the company has announced that it will repay the loans to give way for Fiat to exercise an option to raise its share from 30 percent to 46.

According to one of the people familiar with the case but asked for anonymity due to the confidentiality of the matter, the new debt is expected to price Friday, and three business days are scheduled to finalize the details before the money switches hands.

Chrysler spokeswoman Eileen Wunderlich declined to comment. Insiders have previously disclosed that Chrysler is seeking a $2.5 billion term loan, a $3.5 billion bond offering and a $1.5 billion line of credit.

Italy-based Fiat will start negotiations with banks to increase its credit line to as high as 1.5 billion euros ($2.14 billion) after raising its share in Chrysler, according to three people familiar with the situation.

The company said that it will be paying $1.27 billion to acquire the 16 percent more in Chrysler. Sergio Marchionne, CEO of both Fiat and Chrysler, stated he wants to increase Fiat's share in Chrysler to 51 percent this 2011 in preparation of bringing the U.S. company to public.

If you liked the article, share on:


Login or Create new account to add a comment!


More than three decades ago, the DeLorean DMC-12 was produced by the DeLorean Motor Company. However, production was stopped due to issues within the company. The car itself was decent...
by - October 27, 2016
Tesla is making sure that all models under production will receive the necessary advanced hardware that will allow them to be autonomously driven. The fitment of these advanced hardware to...
by - October 27, 2016
Wondering how fast the 2017 Chevrolet Camaro ZL1 in actual driving? To provide customers a good idea on how fast the 2017 Camaro ZL1 could really get, Chevrolet recently had...
by - October 27, 2016
So, it is official! The new Honda Clarity FCV has the longest verified range of any zero-emissions vehicle currently on the road in the United States. One of the main...
by - October 27, 2016
Many have been anticipating Mercedes-Benz Vans’ newest luxury pickup truck, the X-Class. While Mercedes-Benz has yet to reveal the official production version of the X-Class, it was kind enough to...
by - October 27, 2016