Patrick Rall's picture

Canadian government may sell remaining stake to Fiat

As a result of the “bailout loans” of 2008 and a variety of previous dealings, the Canadian government was left with a 1.7% stake in the Chrysler Group after the Fiat-run Chrysler paid off the balance of those loans but depending on how much Fiat pays for the last chunk of Chrysler owned by the US government, the Canadian government may be willing to sell their final 1.7% to Fiat.
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After Fiat and Chrysler worked together to raise the money to pay off the multi-billion dollar bailout loans, the US government was left with 6.6% of the Chrysler Group while the Canadian government was left with 1.7%. Immediately after paying off the bailout loans and reaching an ownership level of 46% of Chrysler, Fiat/Chrysler chief Sergio Marchionne stated that the company was interested in purchasing the rest of the 6.6% still held by the US government. Is it based on that intent that the Canadian Finance Minister Jim Flaherty stated that Canada may be interested in selling off the last of their stake in Chrysler – but only after they see how much Fiat pays the US for the 6.6% stake held by the American government.

Fiat SpA is currently engaged in negotiations with the US Department of Treasury in an effort to reach an agreed upon price for that last 6.6% but if the two cannot reach an agreement, the decision on the selling price may fall on the shoulders of a third party company who will decide rule the fair market value of the final US-held stake in Chrysler. Regardless of whether Fiat and the US Treasury come to an agreement or if they are forced to call on a third party group to decide on the price, the Canadian government plans to hold onto their little piece of Chrysler until the final selling price for the American-held stake is announced.

TorqueNews will continue covering this matter, bringing you any breaking news as it becomes available!

Source: Automotive News

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