Treasury Secretary Geithner To Meet GM, Chrysler CEOs, Other Executives
WASHINGTON - Treasury Secretary Tim Geithner will hold a meeting with chief executives of major Michigan companies, including General Motors Co. CEO Dan Akerson.
During his visit Thursday to Detroit, he will hold a private roundtable discussion with CEOs and top business leaders including Ford Motor Co. Chief Financial Officer Lewis Booth to gauge the state of Michigan's economy. He will also meet with Chrysler Group LLC CEO Sergio Marchionne when he tours the Jefferson North Assembly plant, reported The Detroit News.
Geithner will make remarks and take questions when he's interviewed in a forum at the Detroit Economic Club during his first visit to Detroit since taking office in January 2009.
Chrysler plans to formally announce Thursday its intent to refinance its $7 billion in government loans to coincide with Geithner's visit. Chrysler may confirm the four banks involved in the financing. As previously reported, they include Goldman Sachs, Morgan Stanley, Citigroup Inc. and Bank of America Corp.
The company could launch a debt offering as early as next week after it reports first quarter results Monday.
Chrysler is expected to launch a debt offering under Rule 144A, which means the company does not have to file a public registration statement with the Securities and Exchange Commission, but can be sold only to qualified financial institutions. It's still not clear what the mix of debt and bonds offered will be.
The automaker is also close to winning a credit rating — a key step needed to refinance its debt. It has been in talks with Standard and Poor's and Moody's to finalize a credit rating. Chrysler paid more than $1.2 billion in interest on its government loans last year.
As part of refinancing its loans, Chrysler will give up its $2.5 billion in untapped U.S. and Canadian loans. The company is also working to obtain a $2 billion or more revolving line of credit from private banks.
Last week Fiat said it would acquire a 16 percent stake in Chrysler for $1.27 billion, contingent on Chrysler refinancing its government loans. Chrysler will mount a roadshow to sell the offering. After it repays the debt, Fiat can obtain another 5 percent of Chrysler — boosting its overall stake to 51 percent.
One reason Fiat acted was that the price it had to pay for the Chrysler stake would have increased if it waited until after Chrysler reports earnings — and possibly a profit — on Monday.
The U.S. and Canadian governments hold about a 10 percent stake in Chrysler. Geithner plans to hail the government's $85 billion bailout and the fact that it saved by some estimates at least 1 million jobs.
Geithner oversees the government's 26 percent stake in GM as part of its $49.5 billion bailout and will have to decide when the government sheds its remaining 500 million shares in GM. A lockup period barring the government from selling GM stock ends May 22.
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