GM Generali

Generali (AQEU:GM)
Historical Stock Chart

From Jul 2019 to Jul 2024

Fiat SpA (F.MI) said Wednesday it expects to sign soon the closing of its deal with Chrysler LLC after the U.S. Supreme Court late Tuesday rejected creditors' objections, paving the way for the car maker to emerge from bankruptcy reorganization.

Shares of Fiat gained on the news as investors had expected the court decision to be delayed by several days. At 0800 GMT, Fiat shares traded up 4% at EUR7.72, outperforming the FTSE Mib index.

"The U.S. court news was a surprise," said Carlo Drago, analyst at Milan-based Centrosim.

Chrysler filed for bankruptcy on April 30 and the U.S. government said it was going to seek a solution in 60 days.

Tuesday's supreme court move is a key victory for the Obama administration as its plan to remake the American auto industry by pushing Chrysler and General Motors Corp. (GMGMQ) through quick restructuring under Chapter 11 bankruptcy proceedings. The government has already injected almost $9 billion in emergency funding into Chrysler since late last year.

As part of the reorganization plan, the new Chrysler will be owned 20% by Fiat, together with U.S. and Canada governments while an over 67% will be controlled by the United Auto Workers.

Fiat will supply the U.S. automaker with engine technology and auto platforms as part of a non-cash agreement struck by its chief executive, Sergio Marchionne.

Equita analysts Wednesday noted that Fiat has the "not-too-easy" task of restructuring a company (Chrysler) that is losing about $100 million a day.

Company Web site: www.fiatgroup.com

-By Sabrina Cohen, Dow Jones Newswires, +39 02 5821 9906; sabrina.cohen@dowjones.com

(Luca Casiraghi and Marco Fusi contributed to this story.)