Fiat stake would be debt free - Chrysler
Friday, 20 March 2009 16:18Chrysler has said that proposed partner Fiat SpA would not assume any of its debt if it takes an equity stake in the US carmaker.
The comments came a day after Chrysler said Fiat would assume 35% of its debt to the US government. The Italian automaker flatly denied such a deal.
'As a potential result of the ongoing discussions taking place related to the Fiat alliance, Fiat would become an equity holder with the same rights and responsibilities as all other equity holders in a newly restructured company,' Chrysler said in a statement.
'To clarify, this does not mean Fiat would assume responsibility for any of Chrysler LLC's debt.'
The number three US automaker has a non-binding deal with Italian automaker Fiat, which has agreed to take a 35% stake in Chrysler in exchange for access to technology and overseas markets.
Under the terms of the deal, Fiat will not pay cash for the stake in Chrysler, which is 80.1% controlled by Cerberus Capital Management.
