News to be Noted-NTN-DaimlerChrysler sells stake in Chrysler

Source Mint, 15th May 2007, page 18 and

http://www.livemint.com/2007/05/14145047/Daimler-hands-Chrysler-to-Cerb.html

DaimlerChrysler AG ended a nine-year investment in money-losing Chrysler, handing control of the carmaker to private-equity firm Cerberus Capital Management LP and getting out from under $19 billion of retirement benefits.

Cerberus will put up $7.4 billion with most of the money invested in Chrysler, while DaimlerChrysler will pay out a net amount of $650 million, the Stuttgart, Germany-based company said on 14 May in a statement. The agreement gives Cerberus 80.1% of Chrysler, while the Germans, who paid $36 billion for the automaker in 1998, will retain 19.9%.

Chrysler lost $680 million last year and ceded market share to Toyota Motor Corp. while relying too much on the stagnant North American market. DaimlerChrysler Chief Executive Officer Dieter Zetsche failed to keep the US carmaker profitable after completing a reorganization he began as head of the business.

Shares of DaimlerChrysler rose as much as 4.73 euros, or 7.8%, the biggest gain since former CEO Juergen Schrempp announced his departure in July 2005, to 65.34 euros and were up 6.5% at 10:47 a.m. in Frankfurt. The stock has surged 31% since 13 February, the day before Zetsche said “all options” were on the table for Chrysler’s future.

KVSSNRao