Chrysler plans to pay back “every cent” of the money it was loaned by the federal government, said CEO Sergio Marchionne, and it will almost certainly do that before the IPO the executive said he wants to hold in the second half of 2011.
Chrysler is already planning to cover about $2.0 billion of the remaining $5.6 billion in loans from Washington, said Marchionne, who also serves as CEO of Chrysler’s Italian affiliate, Fiat. Meanwhile, the maker will soon pay down $600 million of the remaining $1.5 billion it owes the Canadian treasury.
“It would be advantageous to repay it all” before an IPO, said the Canadian-educated Marchionne, during a meeting with reporters. “It would have better optics” in the eyes of potential investors – and would also make it possible for Fiat to increase its stake in Chrysler from the current 20% to a majority 51%.
Earlier this week, Ron Bloom, the Obama Administration’s “car czar,” said that could not happen without complete recovery of the outstanding Chrysler loans.