Chrysler Trying to Round up Financing

Added by Gary Dunn on January 17, 2011

Chrysler Group is currently trying to find ways to pay back a $7bn debt to the U.S. and Canadian Governments before an eventual IPO (initial public offering of shares).

Accoring to Chrysler CEO Sergio Marchionne, “The most likely of the options under consideration is a financing package that would facilitate payment of all government debt prior to an IPO,”.

“Our priority is to put in place a structure where Chrysler would become answerable to the capital markets only,”, he added.

Since the 2009 bankruptcy, Chrysler has been put under the general management of Fiat SpA.

As of September, the company owes $5.7bn to the U.S. Treasury and $1.2bn to the Canadian government.

Chrysler has not yet given a profit report for 2010, citing the financing of the debt as a reason; however, Mr. Marchionne said that the company will post its fourth-quarter results on January 31. The Chrysler CEO also added that so far the automaker’s sales figure is 1,515,999 cars and trucks across the globe. Dissected, the sales include 1,085,211 vehicles in the U.S., 204,955 in Canda, 78,574 in Mexico and 147,259 on other continents.

The Fiat management, now in its first full year at Chrysler, implemented a new manufacturing system across the company’s plants which lead to a $200m reduction in costs.

Sergio Marchionne said that Chrysler may break even with its debts in 2011.