Friday, April 15, 2011

Chrysler, here are the banks that support

Chrysler Group LLC is close to launching the package of debt refinancing to repay the loans granted by the U.S. and Canadian governments over the past two years. The latest rumors speak of four banks chosen to lead the deal. Goldman Sachs, Morgan Stanley, Citigroup and Bank of America these are the banks that are in advanced talks with Chrysler to finalize some 7 billion dollars in debt that the U.S.

House has with governments. But the agreement with the banks is not limited to the balance of the debt: well-informed sources speak of an organization's revolving loan fund to ensure liquidity for the future of the automobile. Recall that the repayment of loans, which Chrysler has received from the Obama administration for the historic rescue work in 2009, would pave the way for Fiat SpA to gain majority control (51%) of the company this year.

This is one of the goals it has set itself the chief executive Sergio Marchionne, who is trying to merge the two automakers. Currently, the Lingotto holds a 30% stake in Chrysler. But these days Marchionne said he wanted to refinance the debt by June, and then proceed with the acquisition of additional ownership shares.

And it is obvious the will of Fiat to move fast on this. Marchionne has defined 2011 as "year of execution" with Chrysler will launch a new range of cars and trucks closer to the line Fiat. It is scheduled to arrive at a Dodge car, which correspond to a larger version of the Alfa Romeo Giulietta developed by Fiat.

Be stressed that so far the ownership of Chrysler was not at all profitable for Fiat: the motivation lies largely in the high interest rates that the U.S. must pay to the United States and Canada. The automaker has in fact had to pay 1.23 billion U.S. dollars of interest until 2010. The contract between the Italian and American is expected that the latter would save up to 20% control of Fiat.

In most Fiat could have up to 35% in increments of 5% each in stages. The further increase of 16% may be exercised only if the debts to the state will fall below the $ 4 billion. If this can be achieved Fiat will be free to increase its stake to 51%.

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