Cerberus Breaks Even on Chrysler Deal
NEW YORK (
) -- Private equity group
Cerberus Capital Management
will essentially break even with its investment in
Chrysler Financial
after
Toronto-Dominion Bank
's acquisition is completed.
Under the deal, Cerberus will get $6.3 billion for the lender and keep over $900 million in Chrysler Financial assets. Cerberus purchased an 80% stake in Chrysler in 2007 for $7.4 billion, but lost its equity stake in the auto manufacturer as a condition of the U.S Treasury Department's bailout deal.
Cerberus, however, kept an equity stake in Chrysler Financial following the bailout that valued the auto lender at $4.75 billion. Cerberus paid the Treasury $1.9 billion to pay off Chrysler Financial's bailout debt. In addition, after the Treasury's exit Cerberus injected about $500 million into Chrysler Financial, according to a
Keefe, Bruyette & Woods'
analyst Brian Klock
said that the deal really benefited every party involved.
--Written by Maria Woehr in New York.
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