Daimler is talking with private equity investor Cerberus Capital Management about selling the German automaker’s remaining 19.9% stake in Chrysler.
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The top priority was to preserve Chrysler, and the entire leadership team was focused on completing the required deals to qualify for emergency US government loans, chief executive Bob Nardelli said in a memo to staff that obtained by Reuters.
Chrysler was working “diligently to finalise our alliance with Fiat and restructure our business by the government’s 30 April deadline,” he was quoted as saying in the memo.
To finalie its planned alliance with Fiat, Chrysler must securing concessions from those who hold automaker’s first-lien loans, which includes a group led by JPMorgan Chase & Co and others, the report noted.
Chrysler has about US$7bn of first-lien loans that stem from its breakaway from Daimler in 2007, and the creditor group had been asked initially to accept a steep reduction.
“Daimler AG has previously announced its intention to divest its ownership share in Chrysler,” Nardelli said in the memo. “Cerberus Capital Management and Daimler are working through this process, and we are confident that this will be resolved.”
