[guyverfanboy]

Fiat talking with banks about buying rest of Chrysler
Looks like Sergio Marchionne is aiming to complete the acquisition of Chrysler by end of 2014 at a cost of about $3 billion.

 

[Mike V.]

Not surprising.

Mike

 

[guyverfanboy]

The sooner they are 100% combined, the better I say.

 

[vipermoon64]

Is this happening so Fiat can have access to Chrysler's bank account? I see no other reason and Fiat seems to need the money.

 

[jerseyjoe]

All it takes is 51% to have control of the company, guess you get 100% of money if you own it all. Not sure if this will make it a public traded company. I don't like that cause stock holders have big say like they did in Daimler. European transportation needs are different than ours. Thats just my say so about it all.

 

[ShadowRider]

Is this happening so Fiat can have access to Chrysler's bank account? I see no other reason and Fiat seems to need the money.

A lot of the workers share your concern. We have already been down this road before. Twice. Remember Chrysler is the one who had to put up the $550 mil to build Fiats in Mexico and now they are going to pull them out in another couple years.

 

[dana44]

I thought part of the BK prevented this from happening, or being able to take money from Chrysler and give it to Fiat, but who knows, things can be changed when they figure a way around the paper.

 

[Alfafan]

Fiat needs somewhere around 75-80% of Chrysler to access its cash. It was in the bailout agreement and I remember reading about it somewhere, can't remember where exactly.

 

[jimboy]

Remember everyone, Fiat still hasn't come to terms with VEBA over the valuation of it's stake, that could take some time as it's going through the courts, if I'm not mistaken.
As far as public trading goes, Fiat shares are sold on the open market, so once Fiat acquires complete control of Chrysler, it too will be part of Fiat Spa., which means it's shares will be part of that, not separated out, unless they go the route of Ferrari, keeping it as a distinct enterprise.
BTW, I really don't think Fiat will go the way of Daimler once it fully acquires Chrysler, it's already been shown that Chrysler Group will be an equally strong or stronger partner in THIS merger. I also read today that the Banks want to see a stronger balance sheet and less debt in both entities before they step up to the plate again, so it may be a while before much of anything happens.
Keep Calm and Carry On!

A lot of the workers share your concern. We have already been down this road before. Twice. Remember Chrysler is the one who had to put up the $550 mil to build Fiats in Mexico and now they are going to pull them out in another couple years.

Chrysler also reports those sales on ITS books, not Fiat's, so they have already benefited. They still build the Journey/Freemont there as well.

 

[drew54]

Whatever happened to the rumors of Chrysler buying Fiat. It is a great way to loan them some money while in keeping it interest free.

 

[JohnRogers]

When would Chrysler lose its "independent" board of directors?

 

[AlfaCuda]

Sergio Marchionne has already confirmed that Fiat and Chrysler are to be merged into a single global entity. Therefore in the near future (next two years) it will become one company. Therefore I do not see why anyone should be worried about Fiat taking Chrysler's cash. It can be argued that Chrysler's cash is actually in Fiat's control since Fiat is already the majority shareholder.

 

[RVC]

Court's decision is coming late march, so after that's out things will move quickly, one way or another.
If the court says SM is right, FIAT will get the additional 6.6% it has already demanded from the VEBA as per the agreement, and apply for the next tranches from there until the IPO that the VEBA will be pushing for.
If the court finds the VEBA is right, SM will just wait for the IPO to buy the rest of the shares in the open market (unless they find an agreement at the last minute, which would be smartest IMO). SM is the one in the driver seat, so he could "manipulate" the valuation of a public company just by "driving the car slower"; just look at what he has done with FIAT in Europe for the last 3.5 years. He's a financial beast first and foremost.

Regarding cash pooling: FIAT could cash pool today if the agreement didn't specifically provide for them not to. IIRC, as soon as the company goes public that impediment falls and they can cash pool regularly; if they don't go public, the agreement says they can still cash pool as soon as they reach 71%(IIRC) of the company.

 

[sebring96hbg]

Until FIAT owns 80%, the cash is protected by agreement. There are provisions for special loans and dividends which are limited as to amount and frequency and must be approved by the independent directors.

I would be surprised if FIAT's scrivener's error argument is persuasive before the court.

 

[MoparNorm]

Regarding cash pooling: FIAT could cash pool today if the agreement didn't specifically provide for them not to. IIRC, as soon as the company goes public that impediment falls and they can cash pool regularly; if they don't go public, the agreement says they can still cash pool as soon as they reach 71%(IIRC) of the company.

Just curious.
Why is there a need to have an IPO, if Fiat assumes full or majority ownership, and pooling ability at 71%?
Fiat already has stock and with Chrysler theoretically combined into that stock, Fiat stock should rise.
Does the deal with VEBA, specifically call for an IPO as a method for VEBA to recapture benefit funds, lost in the bankruptcy?

 

[sebring96hbg]

The Senior Credit Agreement dated May 24, 2011, provided for additional firewall protection of Chrysler's cash. FIAT would have to refinance Chrysler's debt to remove the additional impediments.

 

[jerseyjoe]

Hi Joe in Harrisburg, good to see you active again! When did you get the Alfa?

Anyway as far as the courts protecting Chrysler that's very unpredictable. Our Supreme Court ruling on "The Merger of Equals" was its Daimlers company and they could do what they want with it ! :angry2:

 

[RVC]

Just curious.
Why is there a need to have an IPO, if Fiat assumes full or majority ownership, and pooling ability at 71%?
Fiat already has stock and with Chrysler theoretically combined into that stock, Fiat stock should rise.
Does the deal with VEBA, specifically call for an IPO as a method for VEBA to recapture benefit funds, lost in the bankruptcy?

You are correct, I should have said IF.
But yes, the deal allows VEBA to call for an IPO after a certain point in time in order to have an additional way to cash out (I can't recall if that date has already passed or if its about to).

 

[RVC]

The Senior Credit Agreement dated May 24, 2011, provided for additional firewall protection of Chrysler's cash. FIAT would have to refinance Chrysler's debt to remove the additional impediments.

Yes, and there's no penalty for advanced repayment IIRC (It's been a while and honeslty i have no desire to go read that stuff again ) Well, the title of the thread does say that FIAT is talking to banks, so that would take care of that. I was actually wondering why they would need to do that, since they can already pull on more than enough cash to buy out the rest of the shares.

 

[sebring96hbg]

Hi Joe in Harrisburg, good to see you active again! When did you get the Alfa?

Anyway as far as the courts protecting Chrysler that's very unpredictable. Our Supreme Court ruling on "The Merger of Equals" was its Daimlers company and they could do what they want with it ! :angry2:

I have had it for a few years. I have been restoring it. We are buying a Dart Rallye this Saturday! We are getting the 1.4 with DDCT, 8.4 Uconnect and LED racetrack tail lights.

Ultimately, I don't see FIAT like Daimler. I don't see SM recklessly burning CG's cash on Fiat Auto. My take is that SM will spend strategically to benefit both sides of the house.