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Fiat Ups Chrysler Stake Another 5%

Maker rewarded for plans to build high-mileage Dart.

by on Jan.05, 2012

A preliminary "teaser" image of the new Dodge Dart, which will debut in Detroit on January 9.

With the launch of the new Dodge Dart, making its debut at next week’s North American International Auto Show, Chrysler expects to grab a larger share of the growing compact car segment.

But the maker’s Italian partner Fiat will grab an immediate larger stake in the U.S. maker – boosting its holdings by 5% for adding a new model to the Chrysler line-up that can deliver at least 40 miles per gallon on the highway.

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That was one of the stipulations set by the White House as part of the 2009 bailout of Chrysler.  Fiat initially was granted a 20% stake and effectively put in charge of the U.S. maker’s turnaround.  Since then, Fiat has steadily increased its holdings by meeting a series of additional requirements – most recently by paying off Chrysler’s remaining federal loans and then buying out the shares in the carmaker owned by the U.S. and Canadian governments.

With this move, Fiat now holds a 58.5% stake in Chrysler, Sergio Marchionne serving as CEO of both makers.


Fiat Planning to Buy Remaining U.S., Canadian Shares in Chrysler

Italian maker will push well past 50% stake.

by on May.31, 2011

CEO Sergio Marchionne wants to buys the Chrysler shares now held by the U.S. and Canadian governments.

Fiat intends to buy the remaining shares in Chrysler now held by both the U.S. and Canadian governments, said Sergio Marchionne, CEO of both the American and Italian automakers.

The announcement followed a discussion with Canadian officials and came just days after Chrysler finished paying back $7.5 billion in government loans it received during its 2009 bailout.  By refinancing those loans, Fiat was already able to boost its stake in the American automaker to 46%.

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The Canadian and Ontario governments took a 1.7% stake in Chrysler in return for their help.  The U.S., meanwhile, currently holds a 6.6% stake in the carmaker.  The White House has long indicated its desire to get out of the automotive business and is expected to sell off its holdings as soon as practical.  Canadian officials, however, stressed that they want to see how things go with the American sale before deciding whether to also accept Fiat’s offer.


Fiat to Boost Chrysler Stake to 70% – Could Skip IPO

A surprise in a government filing.

by on May.10, 2011

Fiat may soon up its stake to 70% -- and beyond.

Fiat delivered a surprise in a new SEC filing, revealing plans to boost its stake in Chrysler to as much as 70% once the U.S. maker’s government loans are paid off – something that is expected to happen next month.

There is yet the possibility that Fiat could push its stake even higher by acquiring a large chunk of the Chrysler shares currently owned by a union health care trust.  And a leading industry analyst questions whether that might mean that Chrysler will skip long-discussed plans to return to public trading with an IPO later this year or in 2012.

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The Italian automaker is lining up alternative financing to replace the $7.5 billion it owes the U.S. and Canadian governments.   And, over the weekend, Sergio Marchionne, CEO for both makers, said he expects to complete the transition before the second anniversary of Chrysler’s emergence from Chapter 11 bankruptcy protection, June 10th.

That move would allow Fiat to buy an additional 16% stake in Chrysler for about $1.3 billion – bringing its holdings to 46%.  Meanwhile, the U.S. maker is expected to meet the third of three hurdles set in its federal bailout by the end of the year, a development that would add yet another 5% to Fiat’s holdings.  That would permit the Italian maker to appoint a majority to the Chrysler board, among other things.

But in a document filed with the Securities and Exchange Commission Monday, Fiat said its goal is to increase its stake to nearly 70%, by acquiring the U.S. government’s 8.6% stake in the automaker.