PRLog - May 25, 2011 - DENVER -- DETROIT — In a gesture worthy of former Chairman Lee Iacocca, Chrysler CEO Sergio Marchionne announced Tuesday that the U.S. automaker, which was rescued from bankruptcy in 2009 with billions of dollars in loans from American and Canadian taxpayers, has repaid $7.6 billion to the governments of both those countries.
At the same time, Chrysler's current corporate parent, Italian automaker Fiat, paid $1.3 billion to boost its stake in the U.S. company from 30 to 46 percent. Marchionne is the chief executive of both companies.
On Tuesday morning, Chrysler sent electronic payments of $5.9 billion to the U.S. Treasury and $1.7 billion to Export Development Canada. Marchionne announced the transactions Tuesday afternoon at a Chrysler plant in Sterling Heights, Michigan.
The early repayment, about six years ahead of schedule, is expected to save Chrysler $300 million or more a year in interest charges.
"The loans gave us a rare second chance to demonstrate what the people of this company can deliver," Marchionne said. "Paying back the loans, along with the financial community's investment in refinancing, marks another step in the company returning to a competitive force in the global automotive industry."
Marchionne added: "We owe a debt of gratitude to those whose intervention allowed Chrysler Group to re-establish itself as a strong and viable carmaker."
In a statement, President Obama said, "Chrysler's repayment of its outstanding loans to the U.S. Treasury and American taxpayers marks a significant milestone for the turnaround of Chrysler and the countless communities and families who rely on the American auto industry."
In 1979, Chrysler, then led by Iacocca, requested that the U.S. government guarantee emergency bank loans to help it stave off bankruptcy. In a public ceremony, Iacocca and Chrysler in 1983 paid off the government-backed loans seven years ahead of schedule.
Source: Edmunds Inside Line
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