AUBURN HILLS, Mich. -

In a key move that allows for an ownership increase, Chrysler announced Thursday that it will repay its U.S. Treasury, Canadian Federal and Ontario aid loans this quarter.

The automaker will achieve this by refinancing that debt in a new term loan facility and through a private offering of newly issued debt securities to institutional investors.

The offering will be exempt from registration under the U.S. Securities Act of 1933.

Chrysler said it will use the proceeds of that offering — plus the gains from Fiat’s plans to purchase an incremental ownership interest in the automaker — to completely pay down its debt to the aforementioned U.S. and Canadian governments and take care of the related fees and expenses.

Chrysler intends for the offering’s completion, the credit facilities and Fiat’s equity investment under its call option to happen simultaneously.

“The debt securities will be offered and sold in reliance on an exemption from registration under the Securities Act,” officials stressed. “The debt securities have not been registered under the Securities Act, or the securities laws of any other jurisdiction, and may not be offered or sold in the United States without registration or an applicable exemption from registration.”

When last discussing Fiat ownership in Chrysler, Sergio Marchionne, chief executive officer, said, “We have chosen to accelerate the pace to bring about, in the shortest possible time, the birth of a single group capable of fully leveraging the joint development of the respective international activities.
 
“Chrysler is undergoing an extraordinary industrial and financial turnaround, and Fiat is ready to take control, in order to bring even greater stability and strength to the relationship in the interests of both,” he added. 
 
Editor’s Note: To see the recent Auto Remarketing article with Marchionne discussing Fiat’s plans, click here.