WILL CHRYSLER HAVE THE LAST LAUGH?
This article is from our archives and has not been updated and integrated with our "new" site yet... Even so, it's still awesome - so keep reading!
Published on Sat, Apr 30, 2011
By: The LACar Editorial Staff
Chrysler Says It’s On Its Way To Repay Bailout—In Full BACK SEAT DRIVING—The pundants were pretty hard when the decision was made for a government bailout of General Motors and Chrysler. It was particularly hard on Chrysler. GM was said to have a semblance of surviving the cash shortage—but Chrysler? Most—including many in the senior staff at LA CAR—gave Chrysler little-to-no chance of coming out of it alive. Well, Chrysler has just announced that it looks very likely that it’ll repay every penny—interest included—back to Uncle Sam during the second quarter of 2011. Chrysler Group LLC (“Chrysler Group”) announced that it intends, subject to market and other conditions, to repay in full the outstanding obligations under the loans provided to Chrysler Group by the U.S. Department of the Treasury and the Canadian federal and Ontario governments. Chrysler Group says intends to complete the repayment during the second quarter of 2011 from proceeds of a new term loan facility and newly issued debt securities to be offered and sold to institutional investors in a private offering exempt from registration under the U.S. Securities Act of 1933.
Evidently, Chrysler Group will use the net proceeds of the term loan and the offering, together with the proceeds from the recently announced exercise by Fiat of an option to acquire an incremental ownership interest in Chrysler Group, to repay its loans from the U.S. and Canadian governments in full and to pay related fees and expenses. When it happens—and there is little indication that it won’t—Chrysler will likely have the last laugh. It won’t be the last time that the pendants have been proven wrong. Hats off to you, Chrysler. - Roy Nakano Chrysler Group LLC, formed in 2009 from a global alliance with Fiat, produces Chrysler, Jeep, Dodge, Ram, Mopar and Fiat vehicles and products. The alliance builds on Chrysler Group’s lineage, which goes back to Walter P. Chrysler’s establishment of the car company in 1925. Fiat’s complementary technology dates back to its founding in 1899.