UPDATE: Chrysler just released the following statement: "Cerberus has not reduced or made any changes to its equity stakes in GMAC or Chrysler since the closing of either transaction. Cerberus continues to have voting control over both investments. It is common knowledge, and has been widely reported, that Cerberus made these investments side-by-side with its co-investors at the time of closing. As a general rule, Cerberus does not commit more than 5% of the capital of any of its funds to any single investment."
The Detroit Free Press is reporting via the Financial Times that Cerberus Capital Management has sold more than 50% of its stake in Chrysler LLC and GMAC LLC to a group of around 90 investors. The Freep reports that the investment firm earned up to $1 billion for selling parts of its stake in both companies. Cerberus bought a controlling stake in GM's financial unit back in April of 2006 for $14 billion and bought up Chrysler from Daimler in May of 2007 for $7.4 billion.
Automotive News actually got in touch with a senior Chrysler official today, however, who said bluntly, "Cerberus has not sold any equity in Chrysler." What may be causing the confusion is that when Cerberus bought up 80.1% of Chrysler, it had already aligned itself with co-investors. These 90 investors may have been involved in the transaction from the beginning and own a stake in Cerberus' stake of Chrysler and GMAC. The $1 billion, meanwhile, would then be what Cerberus earned in fees for bringing on the additional investors.
There's clearly a lot of confusion this morning surrounding the Financial Times report and not until Cerberus speaks will we be able to ascertain the nugget of truth amidst all the conjecture.
[Source: The Detroit Free Press, Automotive News]
The Detroit Free Press is reporting via the Financial Times that Cerberus Capital Management has sold more than 50% of its stake in Chrysler LLC and GMAC LLC to a group of around 90 investors. The Freep reports that the investment firm earned up to $1 billion for selling parts of its stake in both companies. Cerberus bought a controlling stake in GM's financial unit back in April of 2006 for $14 billion and bought up Chrysler from Daimler in May of 2007 for $7.4 billion.
Automotive News actually got in touch with a senior Chrysler official today, however, who said bluntly, "Cerberus has not sold any equity in Chrysler." What may be causing the confusion is that when Cerberus bought up 80.1% of Chrysler, it had already aligned itself with co-investors. These 90 investors may have been involved in the transaction from the beginning and own a stake in Cerberus' stake of Chrysler and GMAC. The $1 billion, meanwhile, would then be what Cerberus earned in fees for bringing on the additional investors.
There's clearly a lot of confusion this morning surrounding the Financial Times report and not until Cerberus speaks will we be able to ascertain the nugget of truth amidst all the conjecture.
[Source: The Detroit Free Press, Automotive News]
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