Chrysler today got itself a $2 billion loan that was partially funded by its former owner Daimler AG. Daimler still holds a 19.9 percent stake in Chrysler and offered $1.5 billion of the $2 billion loan while Cerberus coughed up the rest.
While Cerberus and Chrysler say that the loan is simply for contractual reasons, analysts say that Chrysler needs the cash to revamp its product lineup from pickups and SUVs and move toward more compact and fuel-efficient cars.
Chrysler’s CEO Bob Nardelli said earlier this month that Chrysler finished ahead of Cerberus’ expectations with $9 billion in cash.
Global Insight analyst Aaron Bragman says that the loan shows how much Chrysler needs the cash. Bragman said that he wonders if Chrysler is as financially strong as it claims. “We keep hearing that all targets are being met,” he said. “Either that’s not the complete truth, or their targets are rather low.”
Source: Detroit News