DaimlerChrysler will use the repayment of inter-company loans to reduce its debt sharply once the Chrysler sale closes, chief financial officer Bodo Uebber was reported to have told a newspaper.
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The group will also stop issuing bonds and commercial paper in the quarters ahead, Uebber told Germany’s Boersen-Zeitung in an interview published on Friday, according to Reuters.
Cerberus Capital Management, buyer of a majority stake in Chrysler, will repay the intercompany loans – which stood at $36bn at the start of 2007 – when the deal closes, he was reported to have said.
“Based on the favourable maturity structure for bonds, bank loans and commercial paper, Daimler will reduce the debt that is no longer needed to around EUR10bn by September 2007,” he was quoted as saying.
“In addition, bonds that mature in the fourth quarter of 2007 and the first quarter of 2008 will not be replaced. Then Daimler will have no more excess debt on its books by the second quarter of 2008.”
Asked what this meant for debt issues, he said: “We will not issue bonds or commercial paper in the quarters ahead.”
Reuters noted that the company plans to change its name to Daimler AG once the Chrysler sale goes through, expected in the third quarter of this year.
