Fiat exercises call option to buy another 3.3% stake in Chrysler
Fiat recently increased its stake in Chrysler Group LLC from 58.5% to 61.8% making it more possible to do a full merger. Fiat has been hinting on doing a full takeover of Chrysler and expanding its business in the US. Basing on Chrysler's bankruptcy agreement, Fiat has the option to buy an additional 3.3% of share from Chrysler starting this July.
The 3.3% will be coming from the United Auto Workers' retiree health-care trust or VEBA. Fiat has the option to purchase up to 3.3 percent of Chrysler from VEBA every six months until the year 2016. This will reduce Chrysler's share from 41.5% to 38.2%.
Fiat is expected to get the funds from a total of 500 million Euros that it has cut back on investments in Turin by delaying introduction of new models.
"Fiat has the cash resources to carry out the completion of the acquisition of Chrysler," Sergio Marchionne told reporters at a Fiat car launch in this northwestern Italian city. "We can do this at anytime. I don't think the conditions are there for us to do it now."