Wednesday, August 8, 2007

Daimler has money to spend

But the No. 5 carmaker has not made decisions about a special dividend as it undergoes a buyout by Cerberus Capital Management.

FRANKFURT (Reuters) -- DaimlerChrysler still believes it has excess liquidity on hand but has not yet decided what to do with it, a spokesman for the world's fifth-biggest carmaker said Wednesday.

He was reiterating comments that Chief Financial Officer Bodo Uebber made in May.

Will a new subcompact from a Chinese company help Chrysler survive? CNN's Eunice Yoon reports (April 20)
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"We have this excess liquidity and we have said we will decide what to do with it in the interest of shareholders. That remains the case," the spokesman said.

He was responding to market speculation that the group's provision of a $1.5 billion loan to help finance Cerberus Capital Management's purchase of a majority stake in U.S. arm Chrysler could reduce prospects for a special dividend.

Uebber said in a conference call after first-quarter results that Daimler would reveal by February at the latest what to do with the excess funding but declined to give more details.

DaimlerChrysler (Charts) shares fell as much as 3.7 percent but came off session lows after the spokesman's comments, to trade down 2.5 percent at €62.54 by 4:52 a.m. ET, still the leading decliner among German blue chips.

Traders had also cited market talk that U.S. investors were moving out of the stock because it would not be a part-American company after the Chrysler divestment.

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