The U.S. Treasury on Thursday said it reached an agreement to sell the government's stake in the Chrysler Group to Italian automaker Fiat.
With the deal, the Treasury "will have fully exited" its investment in Chrysler under the Troubled Asset Relief Program (TARP).
"As Treasury exits its investment in Chrysler, it's clear that President Obama's decision to stand behind and restructure this company was the right one," Treasury Secretary Timothy Geithner said in a statement. "Today, America's automakers are mounting one of the most improbable turnarounds in recent history -- creating new jobs and making new investments in communities across our country."
Fiat agreed to pay the Treasury $500 million for its 6% stake, or 98,461 shares, of Chrysler.
The Treasury also held the right to proceeds above a certain threshold received by the United Auto Workers retiree trust from the trust's sale of Chrysler equity, as well as a right to purchase all of the shares retained by the UAW retiree trust that Fiat will purchase for $75 million.
The U.S. Treasury will receive 80% of the proceeds ($60 million) from that $75 million, while the Canadian government will obtain 20% of the proceeds ($15 million).
In May, Chrysler repaid $5.1 billion in Treasury loans six years ahead of schedule.
Chrysler and General Motors, the biggest U.S. automaker, required government rescues and underwent bankruptcy reorganizations to survive a severe slump in U.S. auto sales during the 2008-2009 financial crisis.
Fiat has been steering the company after taking a 20% stake as the United States carmaker emerged from bankruptcy in June 2009.
The firm raised its stake in Chrysler twice this year, in January to 25%, and in April to 30%.
Copyright Agence France-Presse, 2011
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