Daimler AG (DAI) Reaches Agreement on Separation from Chrysler
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Daimler AG (NYSE: DAI), Chrysler, Cerberus and the US Pension Benefit Guaranty Corporation (PBGC) signed a binding term sheet on April 27, 2009 covering issues still pending between the parties in connection with Chrysler.
Under this agreement, Daimler's remaining 19.9% shareholding in Chrysler will be redeemed and Daimler will forgive repayment of the loans extended to Chrysler, which were already written off in the 2008 financial statements.
In addition, Daimler has agreed to pay US$200 million into Chrysler's pension plans on the date of the execution of definitive agreements and in each of the next two years. In this way, Daimler is helping to secure pension payments to former employees of DaimlerChrysler. The existing pension guaranty of US$1 billion vis-a-vis the PBGC will be reduced to an amount of US$200 million and will remain in place until August 2012.
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