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Fiat looks to repay government loans, buy another 16% of Chrysler in Q2/2011

by Bill Cawthon on

In a statement released by Chrysler Group this morning, Fiat is confirming its commitment to purchase another 16% of Chrysler Group and says the acquisition will happen at the same time the company repays its government loans, one of the conditions of the original agreement between Fiat SpA and the U.S. and Canadian governments.

Fiat is now saying the repayment and purchase could happen within the second quarter of this year subject to success in obtaining new financing.

The Detroit News is reporting that Fiat will release more details of its plans to pay about $1.27 billion for the additional stake that would bring Fiat’s total holdings to 46% of Chrysler. Fiat can still acquire another five percent of Chrysler, giving it outright control, by building a vehicle that can get a certified 40 miles per gallon in the United States. Fiat believes that milestone will be reached by the end of 2011.

Chrysler Group will announce financial results for the first quarter of 2011 on May 2, 2011.

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.

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