Daimler Makes Deal With Chrysler, Cerberus, USPBG
April 28, 2009 (FinancialWire) — German automaker Daimler AG ((NYSE: DAI) said that it, the company’s former subsidiary Chrysler, Cerberus and the US Pension Benefit Guaranty Corp. have agreed that Daimler’s remaining 19.9% shareholding in Chrysler will be redeemed and Daimler will forgive repayment of loans extended to Chrysler, which were already written off in the company’s 2008 financial statements.
In addition, Daimler has agreed to pay $200 million into Chrysler’s pension plans on the date of the execution of definitive agreements and in each of the next two years. The existing pension guaranty of $1 billion vis-a-vis the PBGC will be reduced to an amount of $200 million and will remain in place until August 2012.
Daimler said that Chrysler and Cerberus waive any claims that might arise from representations and warranties made in the sale of Chyrsler in August of 2007. Accusations were made against Daimler in 2008 that the company had improperly managed certain issues in the period between the signing of the agreement and the conclusion of the transaction.
Stuttgart-based Daimler makes Mercedes-Benz Cars and Daimler Trucks.
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