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Chrysler To Pay Back $7.5 Bil in Government Loans Next Week

No more "Government Motors"?

by on May.19, 2011

Fiat/Chrysler CEO Marchionne.

Chrysler is expected to confirm today it has lined up new financing that will allow it to repay next week the nearly $7 billion in government loans it received as part of its 2009 bankruptcy.

Chrysler CEO Sergio Marchionne has said he had hoped to repay the $5.9 billion owed to the U.S. Treasury and another $1.6 billion provided by Canada before the second anniversary of the maker’s emergence from bankruptcy protection, in June 2009.

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The move will allow Chrysler’s Italian partner, Fiat SpA, to quickly increase its stake in the U.S. maker to 46%, and that is expected to jump to 51% before year’s end.  In fact, Fiat has given recent indications it would like to push its share in the long-troubled Chrysler to as high as 70% and may even skip the planned IPO that would have resumed public trading in Chrysler stock.