Canada says open to selling Chrysler stake to Fiat

Mon May 30, 2011 5:05pm EDT
 
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TORONTO (Reuters) - Canada is open to selling its 1.7 percent stake in Chrysler directly to Italy's Fiat, but will wait to see what price the U.S. government gets for its shares in the automaker before deciding, Finance Minister Jim Flaherty said on Monday.

Fiat took operational control of Chrysler as part of the Detroit-based automaker's U.S. and Canadian-backed bankruptcy restructuring in 2009.

It is in the process of exercising an option to buy the U.S. Treasury's 6 percent stake and the two sides are negotiating a purchasing price.

Fiat has no option to buy the Canadian shares, and Flaherty said Ottawa would consider the outcome of the U.S. deal before deciding if it will sell its stake directly to Fiat or wait for Chrysler's initial public offering, the date of which has yet to be decided.

"We have to look out for good value for Canadian taxpayers," Flaherty said at a joint press conference with Fiat and Chrysler Chief Executive Sergio Marchionne.

"So, certainly, we will look at whatever is proposed that comes out of the process that is underway now with the United States Treasury."

Marchionne said last week that Fiat would be interested in buying Canada's stake in Chrysler for a "reasonable price".

Last week Fiat boosted its stake in Chrysler to 46 percent after repaying $7.6 billion in loans from the United States and Canada through a refinancing deal.

($1=$0.98 Canadian)

(Reporting by John McCrank; editing by Rob Wilson)

 
<p>Canada's Finance Minister Jim Flaherty (L) speaks beside Sergio Marchionne, Chrysler Group LLC. Chief Executive Officer, and Chrysler Canada President and CEO Reid Bigland (R) at the Chrysler Casting Plant in Etobicoke May 30, 2011. REUTERS/Mike Cassese</p>