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Fiat has options to increase Chrysler stake to more than 70%.

May 9, 2011 – 12:04 pm ET
DETROIT (Bloomberg) — Fiat S.p.A. has options to increase its stake in Chrysler Group LLC to more than 70 percent as the U.S. government seeks to exit its investments in the auto industry.
Fiat has an option for 12 months to buy the U.S. Treasury’s remaining stake after it repays debts to the government, Chrysler said today in a filing with the U.S. Securities and Exchange Commission. Chrysler said in April it would issue new debt to repay the government loans, allowing Fiat to exercise an option to increase its stake to 46 percent from 30 percent.

DETROIT — Italian automaker Fiat SpA could own more than 70 percent of Chrysler Group within a year once it repays its government loans and exercises other options.

Chrysler spelled out the terms of Fiat’s ownership in a filing Monday with the U.S. Securities and Exchange Commission.

Fiat announced last month that it would pay $1.3 billion to increase its stake in Chrysler to 46 percent. Fiat expects to have a 51-percent stake by the end of this year, which would allow it to appoint a majority to Chrysler’s board.

In the filing, Chrysler said Fiat also may acquire the U.S. government’s 8.6-percent stake in a 12-month period following the repayment of government loans. Chrysler is expected to repay those loans in the second quarter.

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