Chrysler to repay $7.53 billion in loans before the end of June

Article by Christian Andrei, on April 28, 2011

Chrysler Group is planning to repay $7.53 billion in loans from Canadian and U.S. governments this quarter as it is working towards a merger with its Italy-based partner Fiat S.p.A., as well as an initial public offering.

Repaying the debts will help elevate the company’s image after its bankruptcy proceedings two years ago, Chief Executive Officer Sergio Marchionne said. He is confident that once these loans are repaid, the perception of its brands will improve.

Even if the bailout damaged the image of the company’s brands, Marchionne informed reporters in Detroit last Thursday that the damage was not “lethal.”

He also said that it would be a great achievement if the company can repay the debts within two years from bankruptcy. In a statement, the company revealed that the proceeds from a private offering of a term loan and debt securities to institutional investors will be utilized to repay the debts to the governments.

The company will offer $2.5 billion in bond and a $3.5 billion term loan. It will also seek a $1.5 billion revolving credit line, according to insiders.

Interest as high as 20 percent on the Canadian borrowings and 14 percent on the U.S. debts prevented the company from achieving a net profit, Marchionne said. As for the merger, Fiat, which is also run by Marchionne, can only increase its Chrysler ownership to 51 percent if the automaker has repaid the loans.

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

In the minivan segment, the 2017 Chrysler Pacifica is already impressive in terms of fuel economy figures – as rated by the United States Environmental Protection Agency. In fact, the...
by - December 2, 2016
Having a blacked-out Bentley Mulsanne Speed is already menacing by itself but by naming it as the Bamford X, it became all the more imposing. This model was made by...
by - December 2, 2016
We have good news for those who are waiting for the latest version of the Mazda CX-5 compact crossover. It was just unveiled in November at the 2016 Los Angeles...
by - December 2, 2016
Those familiar with racing know that Marco Wittmann’s win during the 2016 Deutsche Tourenwagen Masters held last May was noteworthy as it was his second title in four seasons. In...
by - December 2, 2016
Volvo has revealed that while its products are used by a number of police organizations around the world, it will be the Swedish police that will get the first chance...
by - December 2, 2016
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries