Fiat's
stake in the Chrysler Group has been increased to 58.5
percent after the final 5 percent increment of the three
performance-related milestones to increase its
shareholding, the arrival of a fuel efficient engine in
the forthcoming Dodge Dart, was ticked off.
As provided in its June 2009 agreement,
Chrysler Group issued a letter to the U.S. Department of
the Treasury stating that it has committed to begin
assembly of a vehicle with an unadjusted combined fuel
economy of at least 40 mpg in commercial quantities in a
production facility located in the United States. As a
result, Fiat’s ownership interest has increased
automatically by 5 percent under the terms of the
agreement.
The ownership interests of the Chrysler Group’s two
remaining shareholders now stand with Fiat holding a
majority 58.5 percent while the
UAW VEBA has the remaining 41.5 percent.
In late December, the Chrysler Group achieved the
specified fuel
economy test, for an unadjusted combined rating of 40
mpg, with a pre-production version of the Dodge Dart,
its new Alfa Romeo Giulietta platform and
mechanicals-based four-door sedan. The new C-segment Dart
will be produced in the United States at the Chrysler
Group’s Belvidere Assembly Plant and scheduled to be
unveiled to the public at the North American
International Auto Show in Detroit next week.
This is the fifth time in the past year that Fiat has
increased its ownership in the Chrysler Group since June 2009
when Fiat initially received a 20 percent stake
in the failed U.S. automaker in exchange for sharing intellectual
property and other resources with the Company.
In January last year Fiat increased that holding to 25
percent when the Chrysler Group received the appropriate
government approvals and committed to begin commercial
production of the Fully Integrated Robotised Engine
(FIRE) at its Dundee facility in Michigan.
On April 12 last year Fiat’s ownership increased to 30 percent as Chrysler Group achieved
cumulative revenue of more than US$1.5 billion
attributable to sales made outside of Canada,
Mexico and the United States and entered into
distribution agreements in Brazil and Europe, as well as
a technology-use agreement.
In connection with the Chrysler Group refinancing and paying
back its U.S. and Canadian government loans in full on
May 24 last year, six years early, Fiat exercised its call option
to increase its ownership interest by
an incremental 16 percent to 46 percent, on a fully
diluted basis.
And on July 21, 2011, Fiat paid US$500 million to
purchase the U.S. Treasury’s remaining 6 percent (fully
diluted) ownership interest and
US$125 million to purchase the Canadian governments'
remaining 1.5 percent (fully diluted) stake, bringing its
holding up to 53.5 percent. In addition, Fiat paid US$75 million to
obtain assignment of the U.S. Treasury’s rights under
the Equity Recapture Agreement.
