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Christopher Bruce2013-05-30 15:21:08

Fiat Has Arranged $10 Billion in Loans to Buy Chrysler

It has deals with multiple banks to make the deal possible

 
 
Slideshow
CEO Sergio Marchionne has made it clear that he wants to won the rest of Chrysler

FiatFiatFiatItaly, 1899 > present159 models
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is very serious about purchasing the remaining 41.5% of ChryslerChryslerChryslerUnited States of America, 1925 > present70 models
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. It has arranged for $10 billion in loans from multiple banks to finance the purchase, according to Bloomberg. If the merger were successful, Fiat and Chrysler would then refinance and consolidate its debt into a single amount. The banks in the deal include Bank of America, Deutsche Bank, Goldman Sachs and BNP Paribas.

The remaining Chrysler stock is currently held by the fund that covers health-care for the United Auto Workers labor union. It received the share in 2009 when Chrysler was bailed out by the government as payment for Chrysler's pension debts to the UAW.

The sale is contingent on an ongoing court case that will decide on whether Chrysler's stock should be valued at its price when it was bailed out or at its current value. The deadline for a ruling on the case is July, which means the negotiations for the merger cannot begin until then.

Not all of the bank's money will go towards the sale. Fiat hopes to pay around $3.5 billion for Chrysler. The rest of the money would go to paying off Fiat and Chrysler's debt and refinancing it at a lower rate.

Fiat has discussed the possibility of moving its headquarters to the US if the merger is successful to take advantage of lower American corporate taxes.

Source: Automotive News

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