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Chrysler Group
CEO Sergio Marchionne, Assistant to
President Obama for Manufacturing Policy Ron
A. Bloom and Deputy Director of the National
Economic Council Brian Deese joined
government officials, UAW representatives
and employees at the Sterling Heights
Assembly Plant, for the loan repayment
announcement. |
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Chrysler Group has
announced the repayment of US$7.6 billion in outstanding
U.S. and Canadian government loans following the
completion of new refinancing transactions. The original
loans were repaid in full, more than six years ahead of
schedule, along with the payment of accrued interest and
additional consideration.
The carmaker made payments of US$5.9 billion to the U.S.
Treasury (UST) and US$1.7 billion to Export Development
Canada (EDC) to retire the loans granted when Chrysler
Group began operations in June 2009. EDC is the holding
company through which the Canadian federal and Ontario
provincial governments extended loans to Chrysler Group.
The Company borrowed US$5.1 billion from the UST and
US$1.6 billion from the Canadian governments in June
2009 (US$2.6 billion from the original loan facilities
was undrawn and the facilities will be cancelled). In
total, Chrysler Group has paid the UST US$6.5 billion
and the EDC US$2.0 billion, including US$1.8 billion in
interest payments and additional consideration.
“Less than two years ago, we made a commitment to repay
the U.S. and Canadian taxpayers in full and today we
made good on that promise,” said Sergio Marchionne,
Chief Executive Officer, Chrysler Group LLC. “The loans
gave us a rare second chance to demonstrate what the
people of this Company can deliver and we owe a debt of
gratitude to those whose intervention allowed Chrysler
Group to re-establish itself as a strong and viable
carmaker.
"Paying back the loans, along with the financial
community’s investment in our refinancing packages,
marks another step in the Company returning as a
competitive force in the global automotive industry,"
added Marchionne.
Chrysler Group confirmed the completion of new financing
transactions consisting of a term loan totaling US$3.0
billion, debt securities totaling US$3.2 billion and a
revolving credit facility of US$1.3 billion. The new
financing will save Chrysler Group an estimated US$350
million a year in interest expenses.
The Company used the net proceeds from the term loan and
bonds, together with US$1.3 billion from an equity call
option exercised by Fiat for an incremental 16 percent
fully diluted ownership interest, to repay the
government loans. The revolving credit facility remains
undrawn. Chrysler Group continues to have more than
US$10 billion in liquidity after the refinancing and
loan payoffs, which includes the undrawn revolving
credit facility.
“Everyone in the extended Chrysler Group family, from
employees to union partners to dealers and suppliers,
have worked tirelessly to deliver on our promises and to
win back public trust in the Company and our products,"
said Marchionne. "There is more work to be done as we
remain focused on fulfilling the goals outlined in our
2010-2014 business plan.” Goldman Sachs advised Chrysler
Group on structuring the financings and Evercore
Partners advised the company's Finance Committee.
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