Chrysler is considering two refinancing options in order to receive the US$4bn loan promised in December by the US Government.
A condition of this bailout was that the car company must submit a viable restructuring plan by next Tuesday, February 17.
According to a report in a Detroit newspaper, a Chrysler vice president Frank Klegon said the company was considering two plans at present. He was speaking at the Chicago auto show.
One of the two plans will leave Chrysler as a stand alone business with the other leading to a full blown merger with Fiat.
Under the first, Chrysler and minority equity owner Daimler, which holds 20% at present, will see their combined stake shrink to below 10%.
The rest of the equity in the new Chrysler will be picked up by the US Government, dominant United Autoworkers’ Union, the group’s banks and Fiat.
Last month the Italian car maker has offered to provide technological know how in return for a 35% stake in the existing Chrysler.
“We will be presenting what a Chrysler plan looks like and how a Chrysler-Fiat plan is augmented to that,” Klegon was quoted as saying.
Talk still continues about Chrysler forming an alliance with Japanese group Nissan too, although a Japanese news agency reported that these discussions have ceased.
Source: Thomson Merger News