THE PATH HAS BEEN cleared for Fiat SpA to take the reins at Chrysler after US Bankruptcy Judge Arthur Gonzalez today announced his ruling approving the sale.
?The sale motion is granted in its entirety and entry into and performance under and in respect of the purchase agreement and the sale transaction is approved,? Judge Gonzalez wrote (AFP).
Following the ruling, the US Administration expects a new company to emerge, possibly within days, provided it is not challenged by disgruntled creditors, parts suppliers and Chrysler?s 789 sacked franchised dealers.
Under the deal, Fiat will secure an initial 20 percent equity in Chrysler. It will however be required to repay the US$9 billion in bail-out loans provided to Chrysler by the US Treasury if it wishes to exercise its right to an additional 31 percent majority holding.
It is also to ?contribute to New Chrysler access to competitive fuel-efficient vehicle platforms, certain technology, distribution capabilities in key growth markets and substantial cost saving opportunities?, Judge Gonzalez wrote.
But not everyone is happy with the buyout, nor the Judge?s ruling ? least of all those losing money in the deal.
While challenges to the ruling will not likely succeed, Fiat SpA has said it will take its offer off the table if the deal is not completed by June 15.
Chrysler filed for bankruptcy protection on April 30th. While it may now emerge within days, the hard part ? turning a profit ? will take considerably longer.