Fiat offers $125 million to Canada for Chrysler stake

BMW London

Fiat is offering about $125 million to buy 1.6 per cent of Chrysler Group that the federal and Ontario governments own.

A spokesman for Ontario Finance Minister Dwight Duncan said the government is still considering the financial merits of the offer.

“We’re still doing some calculations on the Chrysler numbers so it is too early to speculate,” said Andrew Chornenky, Duncan’s press secretary.

A federal Finance Department official said the government would not comment on whether Ottawa would sell its portion of a little more than one per cent in the recovering automaker at that price.

Italy-based Fiat currently owns 52 per cent of Chrysler after recently paying $500 million for the remaining 6 per cent that the U.S. government owned. Fiat also wants to buy about 46 per cent of Chrysler that a United Auto Workers retiree health care trust holds.

Sergio Marchionne, chief executive officer of Fiat and Chrysler, confirmed the offer at a conference in Venice during the weekend. Fiat made the offer last Thursday, he said.

The federal and Ontario governments provided Chrysler with $2.9 billion in loans that helped save the automaker from collapse in 2009. The U.S. government also pumped billions of dollars into the automaker.

As part of that deal, the U.S. and Canadian governments received small equity stakes in the company at no cost.

The governments in both countries have received payment plus interest on the majority of the loans. Marchionne personally thanked the governments at Chrysler plants in suburban Etobicoke and Brampton last week

Source: The Star