Auto-maker will take bank loans to repay governments
April 28, 2011
by The Canadian Press
DETROIT—Chrysler will sell debt to repay $6.6 billion in loans it still owes the U.S. and Canadian governments, a major step toward becoming a publicly traded company again.
Chrysler still owes $5 billion to the U.S. government and $1.6 billion to the Canadian and Ontario governments.
The company will use $1.3 billion from Italy’s Fiat SpA, which runs Chrysler, to help repay the government bailout.
Details of the deal are being worked out, but terms could be disclosed as early as next week once Chrysler releases its first-quarter earnings.
The deal will save Chrysler millions of dollars in interest payments.
The refinancing is a major step toward an initial public stock offering by Chrysler that could come late this year or in early 2012.