Daimler down on talk of Chrysler financing problems

Reuters |
July 11, 2007

FRANKFURT (Reuters) -- DaimlerChrysler shares fell more than 2 percent today on market talk of possible financing difficulties for the sale of U.S. carmaking arm Chrysler to Cerberus, traders said, but Daimler said it was not aware of any difficulties.

Traders cited talk that Cerberus had difficulties financing the purchase of Chrysler, a deal made in May this year and which is scheduled to close in the third quarter.

Cerberus had agreed to buy the majority of Daimler's struggling Chrysler Group for $7.4 billion.

Cerberus had no immediate comment.

"We have no indication that there will be any delay to closing this transaction," a DaimlerChrysler spokesman said, adding that the share price decline could be down to the strong euro against the dollar.

The euro traded at a record high against the dollar today.

DaimlerChrysler shares were down 2.4 percent at 1056 GMT, while Germany's DAX index was down 1.3 percent.