Fiat looking to increase stake in Chrysler to 51% by end of year
Following Chrysler’s announcement of a $1.7 billion loan repayment to the Canadian government, Fiat is looking to increase its stake in the formally bankrupt company.
Although Chrysler has repaid much of the loan, it must pay back a further $1.2 billion to the Canadian government. To do this, Chrysler has taken out a $4.3 billion loan, at a lower interest rate.
Canadian Minister of Finance Jim Flaherty congratulated the automaker for the current repayment, however, he has stated that he does not expect Chrysler to ever fully repay the loans.
Fiat initially received a 20% stake in Chrysler in 2009. However, it plans on increasing its share in the automaker to 51% by the end of this year.
Accordingly, Fiat has declared its option to purchase the U.S. governments remaining 6% stake in Chrysler.
Marchionne in Toronto, says thanks
The CEO of Chrysler and Fiat, Sergio Marchionne, was at the company’s Brampton, Ont. assembly plant this past week to formally thank the Canadian government and Jim Flaherty for the initial loans.
Marchionne made it clear to the Finance Minister that the automaker is very interested in purchasing the remaining Canadian equity, if and when the Canadian government decides to sell.
Currently, Canada still holds about 1.7 % equity in Chrysler.
Flaherty said that he would like to see how the stock transfer plays out in the U.S. before discussing the potential for a sale in Canada.
