Chrysler repays government loans
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Sergio Marchionne, Chief Executive Officer, Chrysler Group LLC
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- More than six years ahead of schedule, Chrysler Group fulfils promise to taxpayers and repays original
government loans totalling US$6.7 billion, in addition to US$1.8 billion of interest and other consideration
- Intervention by U.S. and Canadian governments and strategic alliance with Fiat leads to 16 all-new or
significantly refreshed vehicles currently in dealerships; more than US$3 billion in facility upgrades
- Company’s return to profitability and double-digit worldwide sales increases show new product line-up
gaining momentum in marketplace
Chrysler Group LLC last week announced the repayment of US$7.6 billion in outstanding U.S. and Canadian
government loans following the completion of new refinancing transactions. The original loans were repaid
in full, more than six years ahead of schedule, along with the payment of accrued interest and additional
consideration.
The company made payments of US$5.9 billion to the U.S. Treasury (UST) and US$1.7 billion to Export
Development Canada (EDC) to retire the loans granted when Chrysler Group began operations in June 2009. EDC
is the holding company through which the Canadian federal and Ontario provincial governments extended loans
to Chrysler Group.
The company borrowed US$5.1 billion from the UST and US$1.6 billion from the Canadian governments in
June 2009 (US$2.6 billion from the original loan facilities was undrawn and the facilities will be
cancelled). In total, Chrysler Group has paid the UST US$6.5 billion and the EDC US$2.0 billion, including
US$1.8 billion in interest and additional consideration.
"Less than two years ago, we made a commitment to repay the U.S. and Canadian taxpayers in full and
today we made good on that promise," said Sergio Marchionne, Chief Executive Officer, Chrysler Group
LLC. "The loans gave us a rare second chance to demonstrate what the people of this Company can deliver
and we owe a debt of gratitude to those whose intervention allowed Chrysler Group to re-establish itself as
a strong and viable car maker."
"Paying back the loans, along with the financial community’s investment in our refinancing packages,
marks another step in the Company returning as a competitive force in the global automotive
industry."
Chrysler Group confirmed the completion of new financing transactions consisting of a term loan
totalling US$3.0 billion, debt securities totalling US$3.2 billion and a revolving credit facility of
US$1.3 billion. The new financing will save Chrysler Group an estimated US$350 million a year in interest
expenses.
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The Company used the net proceeds from the term loan and bonds, together with US$1.3 billion from an
equity call option exercised by Fiat for an incremental 16 per cent fully diluted ownership interest, to
repay the government loans. The revolving credit facility remains undrawn.
Chrysler Group continues to have more than US$10 billion in liquidity after the refinancing and loan payoffs,
which includes the undrawn revolving credit facility.
"Everyone in the extended Chrysler Group family, from employees to union partners to dealers and suppliers,
have worked tirelessly to deliver on our promises and to win back public trust in the Company and our products,"
said Marchionne. "There is more work to be done as we remain focused on fulfilling the goals outlined in our
2010-2014 business plan."
About Chrysler Group LLC
Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat S.p.A., produces Chrysler, Jeep,
Dodge, Ram, Mopar and Fiat vehicles and products. With the resources, technology and worldwide distribution network
required to compete on a global scale, the alliance builds on Chrysler Group’s culture of innovation, first
established by Walter P. Chrysler in 1925, and Fiat’s complementary technology that dates back to its founding in
1899.
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