How Chrysler Repaid $7.5 Billion to the U.S. Treasury
On Tuesday, May 24, 2011 Chrysler repaid the $7.5 billion of the debt it owes to the U.S. and Canadian governments. The U.S. Treasury received $5.1 billion in loan payments along with $800 million in interest and fees and the Canadian government received about $1.6 billion in loans and interest according to the Detroit News May 23, 2011 article, "White House officials here Tuesday for Chrysler's $5.9 B repayment."
In a Detroit News May 20 article, "Chrysler raises fund to repay U.S. loan," it states that this repayment money was raised when Chrysler sold $3.2 billion in bonds and got a $1.3 billion credit facility from investors and commercial lenders. These fund along with a $1.27 billion investment from Fiat was used to repay the government loans.
Fiat's investment increases its ownership in Chrysler from 30% to 46%. The U.S. government will still own 6.6%, Canada will own 1.7% and the UAW's Retiree Medical Trust will own 45.7% of Chrysler.
According to the Detroit Free Press Article of May 28, 2011 "Fiat to buy remaining U.S. stake in Chrysler," Fiat announced on Friday May, 27 that it has asked to buy the remaining 6% of Chrysler still owned by the U.S. government. That would bring its ownership to 52% of Chrysler causing it to no longer be an American controlled company. This deal is expected to be closed by June 10, 2011. The UAW VEBA Trust will still own 45.7%. Will the medical trust be in danger since Chrysler will not be an American company? Will Chrysler still be subject to American laws, taxes and jurisdiction?