Here’s What Taxpayers Lost in Chrysler Sale to Fiat
The U.S. Treasury Department announced Thursday that it has reached a deal to sell its remaining 6 percent interest in Chrysler to Fiat (BIT:F) for $500 million. With 98,461 shares, that amounts to $5,078 per share. The deal will make Fiat the majority shareholder in Chrysler with a 52% stake in the company.
Fiat will also pay $75 million for the Treasury’s rights to shares held by the United Auto Workers’ Voluntary Employee Beneficiary Association, a trust fund that helps pay medical bills for retired auto workers. The UAW’s VEBA currently owns nearly 46% of Chrysler. Of the $75 million, the U.S. will retain $60 million and $15 million will go to the Canadian government, according to a prior agreement stipulating that Canada receive 20% of any option sale on the VEBA shares.
Under the controversial TARP program — Troubled Asset Relief Program — the U.S. government gave Chrysler a total of $12.5 billion. When Thursday’s deal closes, Chrysler will have returned $11.2 billion of that investment. It is unlikely the government will recover the remaining $1.3 billion.