Chrysler details plan to pay off government loans
CHICAGO — Chrysler on Thursday detailed a $7.5 billion refinancing plan that will allow it to pay off government loans and expand Fiat’s stake in the US automaker.
Chrysler said the $3.2 billion bond issuance, $4.3 billion in loans and the Fiat equity investment will close on Tuesday.
Chrysler and General Motors, the biggest US automaker, required government rescues and underwent bankruptcy reorganizations to survive a severe slump in US auto sales during the 2008-2009 financial crisis.
Fiat has been steering the company after taking a 20 percent stake as the US carmaker emerged from bankruptcy in June 2009.
Fiat has raised its stake in Chrysler twice this year, in January to 25 percent, and in April to 30 percent.
It took a step toward becoming one of the biggest automakers in the world with a $1.3-billion deal to raise its stake in Chrysler to 46 percent announced April 21.
The Italian automaker said it expected to increase its stake to 51 percent before the end of 2011.
Chrysler posted its first post-bankruptcy quarterly net profit on May 2 of $116 million for the first quarter, compared with a net loss of $197 million in the year-ago period.