Fiat expected to close Chrysler deal shortly
Fiat SpA's shares rose more than three per cent yesterday as a group led by the Italian car maker readied to buy Chrysler after the US Supreme Court removed the final obstacle to the deal. In the morning, shares were up 3.7 per cent at €7.71, more than...
Fiat SpA's shares rose more than three per cent yesterday as a group led by the Italian car maker readied to buy Chrysler after the US Supreme Court removed the final obstacle to the deal.
In the morning, shares were up 3.7 per cent at €7.71, more than twice the rise in the DJ Stoxx auto sector.
In a statement, Fiat, which is leading a group that includes a union-aligned trust as well as the US and Canadian governments, said it expected to close the deal shortly.
In a victory for the US Administration driving the restructuring of bankrupt Chrysler, the Supreme Court denied a request from Indiana pension funds to delay the sale.
Erich Merkle, an independent auto analyst based in Grand Rapids, Michigan, said the decision was also good news for General Motors Corp. The company is using a similar quick-sale strategy to facilitate its government-backed trip through bankruptcy.
The court decision followed a one-day stay issued by Justice Ruth Bader Ginsburg that prevented the Chrysler-Fiat deal from closing on Monday as planned. The Fiat option was the only one pursued to save Chrysler from collapse.
The pension funds said the bankruptcy and appeals courts were moving too fast. They contended that Chrysler's sale would unlawfully reward unsecured creditors ahead of secured lenders.
Chrysler sought bankruptcy on April 30. GM entered court protection on June 1.
Separately in New York, Chrysler won bankruptcy court approval to cut 789 dealerships, a quarter of its showrooms, in a move that drew an angry response from a group of Senate lawmakers.
GM plans a quick sale process that would allow a much smaller automaker to emerge from court protection in as little as 60 days under the majority government ownership.