Chrysler expected to payback government coffers
Posted May 24, 2011 7:28 am.
This article is more than 5 years old.
TORONTO, On. – Canadian and American taxpayers can expect a payback from the Chrysler corporation.
The automaker, which is two years removed from bankruptcy protection, will be sending billions of dollars back to the government coffers.
Chrysler will pay the federal and Ontario governments $1.7-billion of the $3.2-billion it borrowed as part of its bankruptcy reorganization.
The governments have a 2.2 per cent ownership stake, which will garner more cash once Chrysler is re-listed as a publicly traded company.
Chrysler will also hand over nearly $6-billion it owes to the U.S. government.
The vehicle manufacturer reported its first profit, $116-million, in over two years in the first quarter.
Theoretically, it’s actually taking on debt from other sources to pay back the government borrowing, issuing $3.2-billion in bonds and $4.3-billion in bank loans, along with another $1.3-billion investment from Italian automaker Fiat. Fiat now owns 46 per cent of the company.
