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Canada to take stake in Chrysler

2009-05-01 09:57

Ottawa - The Canadian government will take a 2% equity stake in the new, restructured automaker Chrysler LLC, Ottawa said in a joint statement with Washington on Thursday.

The Canadian government, along with the province of Ontario, also said it would provide $2.42 billion in financing to assist with the restructuring process.

Chrysler filed for Chapter 11 bankruptcy in the United States earlier in the day and also entered into an alliance with Italian carmaker Fiat SpA. Both governments had given the ailing Detroit firm until the end of Thursday to agree to the Fiat deal or lose the chance to obtain financing.

The United States will take an 8% stake in the new firm and provide $8.08 billion in financing. Washington will appoint four independent directors to the new board and Ottawa will name one.

The two governments also said they would continue to co-operate closely as they work to help complete a similar restructuring at General Motors Corp .


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