The way is clear for Italian automaker Fiat to enter the U.S. market by buying what's left of Chrysler after that company reorganizes under bankruptcy protection.
Autoblog reports, "There was a minority group of some 20 Chrysler lenders that were fighting the repayment arrangements Chrysler was trying to make before Chrysler declared bankruptcy." The group, "Led by Oppenheimer and Stairway Capital," said it was collectively owed $3.9 billion and objected to Chrysler's to void much of that debt in bankruptcy.
However, Motor Trend reports, "The group halted its plans after two of its members withdrew today, leaving it with three members and an under-2.8% share of Chrysler's $6.9 billion in senior debt." The Obama administration had coordinated an offer of $2.25 billion for the $6.9 billion total. "Major debt holders -- JPMorgan Chase, Citigroup, Goldman Sachs and Morgan Stanley -- agreed to the cash settlement of 29 cents on the dollar,' but the group of smaller lenders had objected.
The New York Times adds, "Dissident creditors had an uphill battle from the start," with four major banks that had already agreed to the bankruptcy plan holding "about 70 percent of the secured debt."
The move clears a major obstacle to Chrysler's plan to merge with Fiat. Motor Trend reports, "Chrysler expects to complete its surgical Chapter 11 bankruptcy within 30 to 60 days, by the end of which Fiat would hold a 20% stake in the U.S. automaker in exchange for sharing small vehicle platform and engine technology." Fiat's stake, however, would be a controlling interest, because the only larger stakeholder - a health plan controlled by the United Auto Workers Union - would hold only non-voting stock. "Current Fiat CEO Sergio Marchionne will serve double duty as CEO of Chrysler as well, following bankruptcy proceedings."
The obstacles, however, are not entirely gone. Autoblog reports, "Now it's on to dealers and suppliers, and that little issue of product line-up."