Italian automaker Fiat says it would like to buy Canada’s interest in Chrysler, as the resurgent company repays its multibillion-dollar government loans and moves back into the black.
But after a meeting with Sergio Marchionne, the chief executive of both Chrysler and Fiat, Jim Flaherty, the finance minister, said that Canada would let the divestment process in the United States unfold before making any decision about its holdings.
The Canadian governments received about 1.7 per cent of Chrysler two years ago as part of a bailout that also provided $1.7 billion in loans to help the Detroit company survive the North American auto sector’s worst downturn ever. The problem here is that Fiat, unlike in the US, has no way through which to convince the Canadian government to sell.
Fiat initially received a 20 percent stake in Chrysler in 2009 for providing Chrysler with management expertise and technology.
Since then Fiat has been increasing its holdings in Chrysler and will soon control more than half of the company.
On May 24, Chrysler repaid the $6.7 billion it owed, plus interest. On Tuesday, Chrysler made a payment of $5.9 billion to the US Treasury and $1.7 billion to Export Development Canada (EDC). An extra $2.6 billion from the original loan facilities was undrawn and the facilities have been canceled.