Marchionne: Fiat has enough cash raise stake in Chrysler to 51%
In a statement on track with, or ahead of, past ones, Fiat & Chrysler CEO Sergio Marchionne has said that Fiat has the cash needed to raise its stake in Chrysler from 25% to 51% this year. Past statements said that increase would be to 35%. The company reported that it had $21.8 billion in cash at the end of the year, 28% more than a year earlier. Analysts are saying that Fiat may pay as much as $4.4 billion for its 16% increase.
In order for Fiat to push to the maximum allowed 51% stake, it would have to total $1.5 billion in sales outside of North America, obtain agreements from 90% of its Latin American dealer network. It would also have to develop a compact car on a Fiat platform that will achieve 40 mpg. Marchionne expects to meet all of these milestones this year.
All is not in the clear though, as Chrysler must first repay the US and Canadian bailout loans before Fiat raises its stake.
-By: Stephen Calogera
Source: Automotive News