Word: stakes
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Dates: during 2000-2009
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...auto industry crisis was beginning to look complicated, the latest news from Chrysler is sure to make it a head spinner. The deal announced this week not only gives Italy's Fiat S.p.A. a flexible stake in Chrysler, but turns the ultimate control of the automaker into the financial equivalent of a five lane roundabout...
Chrysler is nominally controlled by Cerberus Capital Management, which acquired an 80.1% stake in the company from Daimler AG in August, 2007. Fiat will get 35% of Chrysler under terms of the yet-to be finalized deal. The terms also grant Fiat the option of raising its stake to 55%. (See three Fiats you might like owning...
Cerberus is already slated for dilution under the terms of the government bridge loan, agreed to in December. The bridge loan gives the U.S Treasury warrants to purchase 5% to 15% of the Chrysler shares now in the hands of Cerberus. Fiat will eat further into the Cerberus stake, and it also has the option of tapping into Daimler AG's remaining stake in Chrysler as a way to build its stake to 55%, according to Rebecca Lindland of the consulting firm of Global Insight...
...Fiat cruises into the ownership roundabout, Daimler is clearly looking for the exit. The German automaker owns a 19.9% stake in Chrysler but wrote down the value of the shares to zero last autumn (how's that for pessimism). Negotiations begun by Cerberus back in September to purchase Daimler's stake broke down. However, Daimler could transfer the Chrysler shares to Fiat for non-cash consideration such as patents or technology. (See pictures of the remains of Detroit...
...step in. Creditors don't want to see the stores themselves running clearance. Why trust the executives who put a company in bankruptcy to manage a sale that covers their losses? Plus, soon-to-be unemployed managers are busy fishing for other jobs. They don't have a real stake in the sale. (Read "Q&A with Best Buy CEO Brad Anderson...