Searching Inventory...

Fiat has options to increase Chrysler stake to more than 70%.

Fiat 500

SOUTHFIELD, Michigan — Fiat S.p.A. has options to increase its stake in Chrysler to more than 70 percent as the U.S. government seeks to exit its investments in the auto industry.

Fiat may buy the U.S. Treasury’s remaining stake in the 12 months after it repays debts to the government, Chrysler said on Tuesday in a filing with the U.S. Securities and Exchange Commission.

Chrysler said in April it would issue new debt to repay the government loans, allowing Fiat to exercise an option to increase its stake to 46 percent from 30 percent.

Selling the Treasury’s stake to Fiat would allow the government to get out of Chrysler more easily than if it waited for an initial public offering, said Dennis Virag, president of Automotive Consulting Group in Ann Arbor, Michigan.

“It’s a two-way street: It lets the government get out of Chrysler quicker and it lets Chrysler get out from under the government quicker,” Virag said in a telephone interview.

The Treasury holds an 8.6 percent stake in Chrysler, the company said last month. That amount would be reduced when Chrysler meets the final of three performance milestones that each give Turin, Italy-based Fiat an additional 5 percent stake.

The final goal, to build a vehicle that gets 40 mpg in the U.S., should be met this year, Sergio Marchionne, chief executive officer of Chrysler and Fiat, has said.

 

 

Leave a reply

Payment Calculator

$

Recent Comments

    Categories