Italian automaker Fiat has reached an agreement to buy the U.S. government’s remaining stake in Chrysler for an estimated $560 million.
The U.S. Treasury Department said Thursday Fiat will pay $500 million to buy the Treasury’s six percent interest in Chrysler. The department is also getting $60 million of the $75 million Fiat is paying to buy Chrysler shares held by a trust for retired autoworkers. The Canadian government will receive the remaining $15 million.
The U.S. government lent Chrysler $12.5 billion in 2009 as it teetered on the brink of collapse amid the global financial crisis. The Treasury Department says it has been reimbursed more than $11.2 billion of that amount, including a $5.1 billion payment late last month.
But the Treasury has acknowledged it is unlikely the loan will be repaid in full.
Fiat, which assumed management of Chrysler after it emerged from bankruptcy protection in 2009, will now hold a 52 percent majority interest in the company.
President Barack Obama will announce the deal Friday during a visit at a Chrysler plant in Ohio, where he will defend his administration’s decision to provide Chrysler and General Motors with more than $80 billion in emergency loans under the Troubled Asset Relief Program, which was created in 2008 to bolster the U.S. financial sector.
The U.S. Treasury Department says that since the two companies emerged from bankruptcy in June 2009, the auto industry has added more than 115,000 jobs.