Auburn Hills, Michigan – The U.S. Bankruptcy Court has approved a process for selling substantially all of Chrysler LLC’s assets, paving the way for a transaction with Fiat.
In its motions, Chrysler argued that it is imperative the process be completed expeditiously, in order to preserve key relationships with suppliers, dealers and other business partners. New financial commitments from the U.S. and Canadian governments also require the consummation of a transaction with Fiat within 60 days, and will make debtor-in-possession financing available for only that period.
Recently-announced agreements with Canadian and U.S. auto worker unions providing for modifications to the collective bargaining agreement are also conditioned on the expeditious consummation of the Fiat transaction.
Chrysler said that while it has already conducted discussions with Nissan, General Motors, Volkswagen, Tata Motors, Magna, GAZ, Hyundai, Honda and Toyota, and others, over an extended period of time, the discussions produced no viable alternative to the proposed alliance with Fiat. In its filings, Chrysler confirmed that the Fiat transaction represents the best and highest bid for Chrysler’s assets. To be successful, an alternative bidder would have to surpass the value of the terms of the agreement with Fiat.
As part of the bankruptcy process, a sale notice will be circulated, providing opportunity for any interested party to emerge. The court has set deadlines of May 20 for submission of bids; May 26 for the notice of designation of lead bidder; and May 27, 2009 for the sale hearing to consider the approval of the proposed sale.