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U.S. Treasury to fully exit TARP investment in Chrysler

06-03-2011 11:34 BJT

WASHINGTON, June 2 (Xinhua) -- The U.S. Treasury Department announced on Thursday that it plans to fully exit its Troubled Asset Relief Program (TARP) investment in auto maker Chrysler Group.

The Treasury said in a statement that it reached an agreement to sell its remaining 6 percent equity stake in Chrysler to Fiat. After the completion of this transaction, the Treasury will have fully exited its TARP investment in the Detroit-based auto company.

The expected combined proceeds to Treasury from this transaction would reach 560 million U.S. dollars, noted the statement.

"As Treasury exits its investment in Chrysler, it's clear that President (Barack) Obama's decision to stand behind and restructure this company was the right one," said Treasury Secretary Timothy Geithner.

Six years earlier than planned, Chrysler this week repaid its outstanding government loans, latest evidence of the turnaround of the U.S. auto industry.

Treasury committed a total of 12.5 billion dollars to Chrysler under TARP's Automotive Industry Financing Program (AIFP). Following the closing of Thursday's transaction, Chrysler will have returned more than 11.2 billion dollars to taxpayers including principal repayments and interest, but the Treasury is unlikely to fully recover the difference of 1.3 billion dollars, according to the statement.

Two years after General Motors (GM) and Chrysler were on the edge of bankruptcy, the two U.S. auto makers and Ford have all returned to profitability and the industry has added new shifts and 115,000 jobs, Geithner noted in an article published on Wednesday.

However, analysts held that the spiking energy price and cautious attitudes of the U.S. consumers due to the stubbornly high unemployment rate are hampering the nascent manufacturing and broader economic recovery.

Editor:Yang Jie |Source: Xinhua

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