23.04.2011 PATH IS CLEARED FOR FIAT TO TAKE A CONTROLLING STAKE IN CHRYSLER GROUP

DODGE CHARGER 2011
DODGE CHARGER 2011
DODGE CHARGER 2011

Fiat has announced that it has reached an agreement with the U.S. government regarding the exercise of the Incremental Equity Call Option which will give the Italian carmaker a controlling share in the Chrysler Group once Treasury Department loans are repaid.

Under this agreement, Fiat will exercise in full its Incremental Equity Call Option subject to and concurrently with the closing by Chrysler, in the second quarter of 2011, of a refinancing transaction in which Chrysler’s US and Canadian government debt is fully repaid. Upon completion of the transaction, Fiat’s interest in the Chrysler Group will increase by an incremental 16 percent. The call option, which wasn't pegged to a fixed amount, it has now been announced will be exercised at a price of US$1,268 million.

Fiat has already raised its initial post-Chapter 11 bankruptcy position in the Chrysler Group of 20 percent up to 30 percent through two increments of 5 percent. A tranche of 5 percent Fiat has already indicated will be completed during this year, bringing its total stake to 35 percent. Exercising the call option to acquire a further 16 percent equity will bring Fiat's stake to a controlling 51 percent.

"The transaction that we are announcing [...] represents a historic step for Fiat and Chrysler and is a source of great satisfaction and pride for both," believes the Chairman of Fiat, John Elkann. "Fiat, together with Chrysler, will create a stronger automobile group, with a full range of products, present in every market around the world and able to compete with the best. Over the past couple of years, Fiat and Chrysler have worked side by side with commitment and mutual respect. With the contribution of everyone who works with us and with the full support of myself and my family, from today this spirit of collaboration will become even stronger, as we continue to produce appealing, fun, safe and eco-friendly automobiles."

Fiat CEO, Sergio Marchionne, said: "This is a fundamental step toward completion of the momentous integration of Fiat and Chrysler, initiated less than 2 years ago, that will result in the creation of a global automaker. We have chosen to accelerate the pace to bring about, in the shortest possible time, the birth of a single group capable of fully leveraging the joint development of the respective international activities. Chrysler is undergoing an extraordinary industrial and financial turnaround and Fiat is ready to take control, in order to bring even greater stability and strength to the relationship in the interests of both. The transaction announced today, together with the expected achievement of a further 5% interest before year end, will enable us to bring to fruition the vision upon which the alliance was founded: the creation of an efficient and competitive global automaker, possessing advanced technologies and the determination to establish itself as a leader in the sector. In so doing, we will be able to guarantee our employees a more certain future and challenging environment, where cultural exchange and integration, together with a competitive spirit, will provide the ideal conditions for their professional and personal growth."
 

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