: Is Cerberus "bailing-out"?
chose this title cuz I really don't understand this...
are they trying to 'foist' Chrysler off on anyone they can?
Cerberus to Give Up Chrysler Auto Equity for Loans - Bloomberg (Update3) (http://www.bloomberg.com/apps/news?pid=20601087&sid=am0FQ00tp4A0&refer=home)
By Jason Kelly
Dec. 19 (Bloomberg) -- Cerberus Capital Management LP, the buyout firm that owns Chrysler LLC, plans to hand over equity in the companyís automotive operations to workers and creditors as part of its emergency loan lifeline from the U.S. government...
...Cerberus will transfer its ownership stake in Chryslerís automotive business as part of the government agreement, which requires the car companies to reduce their debt by two-thirds and to cut expenses. Cerberusís co-investors, who it has declined to name, will also give up their equity in the business. Cerberus declined to give a value for the ownership interests.
Chrysler Financial Stake
The investment in Auburn Hills, Michigan-based Chrysler accounts for about 7.5 percent of Cerberusís $27 billion in assets under management, according to the statement.
Cerberus will retain its equity stake in Chrysler Financial, the automakerís lending arm, and use profits or other money generated from that business to provide a $2 billion backstop to the government loan, according to the statement...
...The firm, run by former Drexel Burnham Lambert Inc. banker Stephen Feinberg, has other car troubles. GMAC LLC, the auto and home lender that Cerberus controls, is scrambling to line up more support for a $38 billion debt swap, part of a plan to remain viable by becoming a bank holding company.
a bit more... (http://www.bloomberg.com/apps/news?pid=20601087&sid=am0FQ00tp4A0&refer=home)
12-20-2008, 01:10 PM
it is a 100% equity dump, wow
12-21-2008, 09:50 AM
The beginning of the end of Chrysler.
tho part of a larger article, here's the Cerberus section
(I'm starting to really LONG FOR a reason to start saying Chrysler & Mopar again :( )
THE U.S. AUTO INDUSTRY BAILOUT (http://www.autonews.com/article/20081222/COPY/312229919/1142).
Rescue raises thorny questions (http://www.autonews.com/article/20081222/COPY/312229919/1142)
Futures of GMAC, Saturn, Cerberus are still unclear (http://www.autonews.com/article/20081222/COPY/312229919/1142).
Bradford Wernle and Jamie LaReau
Automotive News Europe
December 22, 2008 06:01 CET
...Can Cerberus make an exit?
Cerberus Capital Management LP is offering its entire equity stake in Chrysler to labor and creditors as part of a $4 billion federal bailout.
Under the federal loan, Chrysler needs to swap equity for debt to reduce its debt load and to fund half of its obligation to the UAW voluntary employee beneficiary association trust with stock.
Cerberus also said Chrysler Financial, which it also owns, would offer $2 billion to backstop the federal loan. Cerberus acquired 80.1 percent of Chrysler for $7.4 billion in 2007.
"Cerberus is really focusing on the lending side of the automobile industry," said Lars Luedeman, head of auto analysis for Grant Thornton in suburban Detroit. "They're effectively offering up the automotive side of the operation."
The Cerberus move will help Chrysler restructure and perhaps find a partner, analysts say.
"It's really a prepackaged bankruptcy without the prepack where equity is no longer in control," says Kimberly Rodriguez, also of Grant Thornton. "It's a cooperative way of handing over your position in a company to help it see another day."
more... (full article) (http://www.autonews.com/article/20081222/COPY/312229919/1142)
12-22-2008, 07:16 PM
it is a 100% equity dump, wow
Technically, it is only 80%. Daimler still owns the other 20%.
via Jalopnik: CNBC's Jim Cramer Takes On Bob Nardelli With A Home Depot T-Shirt (http://jalopnik.com/5117559/cnbcs-jim-cramer-takes-on-bob-nardelli-with-a-home-depot-t+shirt)
ripping off & enhancing said T-shirt (attached) pre-ripped off from
CNBC: Cramer's Outrage... with Cerberus and more (VIDEO) (http://www.cnbc.com/id/15840232?video=975200482&play=1)
keeping with the general theme...
Two more out the door: Meyer and Murtagh leave Chrysler ...Autoblog (http://www.autoblog.com/2008/12/27/two-more-out-the-door-meyer-and-murtagh-leave-chrysler)
by Jonathon Ramsey on Dec 27th 2008 at 4:02PM
A little over a year ago, Chrysler was poaching and hiring folks with big brains to be a part of its executive turnaround team. Now a few of those hires, along with the old guard, are walking out the front door. Deborah Meyer came over from Toyota, where she had been VP of marketing for Lexus, and she took over the chief marketing officer spot at the Chrysler, LLC. At the time we wrote, "She must have been aware of the situation when she accepted the offer, however, so perhaps she sees hope in Chrysler's new beginning." Apparently, hope ran out, and Meyer has vacated her post effective immediately.
Phil Murtaugh ran General Motors' gangbuster operations in China, left the company, and then was picked up by Chrysler a few months later. He fulfilled the same role at Chrysler, yet with the Chery/Dodge Hornet as the most public example, he couldn't engineer the same success. He has called "Time!" at Chrysler, and leaves at the end of this month. Meyer and Murtaugh's departures this month follow those of Chrysler's global purchasing head and its global service and parts head.
adding on thanks to Stťphane Dumas at GMI (http://www.gminsidenews.com/forums/f58/meyer-murtagh-leave-chrysler-73272/#post1604335)
Predictions: 9 For '09 In Autos - CNBC (http://www.cnbc.com/id/27926697)
Posted By: Phil LeBeau
Tuesday, 2 Dec 2008
In an industry going through as many changes as we've seen with the autos, it's probably not the smartest move to make predictions about what to expect in the next year. That said, here are my predictions.1. Chrysler will be sold.
This isn't hard to imagine. The company is a shell of what it once was, it has just enough cash to stay out of bankruptcy, and the parent Cerberus wants to unload the company. The Big 3 will turn into the Big 2.
3. A Chinese auto maker will buy its way into the U.S. market.
Companies like Geely and SAIC have the desire to get a footprint in the U.S. and in a down market, '09 could be the time to buy a U.S. brand or slice of an auto maker.
7. Fiat will return to the US
The Italian auto maker wants to get back in the states and it has the chance to do so if it can buy a U.S. brand and the dealer network that goes with it.
so WOULD a partnenship be a solution?
& where/who do they find to be their Obiwan Kenobi*???
* quote Princess Leia, "HELP US, Obiwan Kenobi - You're our only hope!"
Cerberusís Equity in Chryslerís Auto Company to Be Eliminated - WallStreetJournal (http://blogs.wsj.com/autoshow/2009/03/30/718/)
By Neil King Jr. and John D. Stoll
March 30, 2009, 5:44 PM ET
Cerberus Capital Management will lose its equity stake in Chrysler LLCís struggling automotive company as a condition of the Treasury Departmentís bailout deal with the U.S. auto maker, according to several people familiar with the matter.
The New York private-equity firm purchased an 80% stake in Chrysler in 2007, promising to bolster the auto makerís performance by operating as an independent company. The plan, however, collapsed due to an unprecedented slowdown in the U.S. auto industry and a lack of capital at the auto maker to weather the storm.
One Obama administration official, speaking on the condition of anonymity, said Cerberusís equity stake no longer holds value and said the firmís ownership will come to an end. In term sheets released by the Treasury Department on Monday, the government said Chryslerís restructuring ďat a minimum will require extinguishing the vast majority of Chryslerís outstanding secured debt and all of its unsecured debt and equity.Ē
Cerberus will maintain a controlling stake in Chryslerís financing arm, Chrysler Financial, according to two people briefed on the plan. Cerberus will utilize the first $2 billion in proceeds from its Chrysler Financial holding to backstop a loan allocated to Chrysler automotive in December by the Treasury Department...