Tuesday, June 3, 2008

No stakes in Chrysler, GMAC sold

Cerberus says it still has control


Cerberus Capital Management hasn't sold any new stakes in Chrysler LLC or GMAC LLC, the investment company said Monday afternoon.

The Financial Times reported Monday morning that the private-equity firm had sold more than half of its stake in Chrysler and GMAC to about 90 investors for as much as $1 billion for stakes in one or both companies.

People familiar with the original Chrysler and GMAC deals told the Free Press that Cerberus used co-investors in the deals' financing and that nothing has changed in either case.

"Cerberus has not reduced or made any changes to its equity stakes in GMAC or Chrysler since the closing of either transaction. Cerberus continues to have voting control over both investments," Cerberus said in a statement. "Our commitment to these companies has not changed."

A group of investors led by Cerberus acquired 51% of GMAC for about $14 billion in 2006. Last year, Cerberus acquired 80.1% of Chrysler and invested $7.4 billion in the automaker.

In September, the Wall Street Journal reported that "Cerberus mitigated its own risk by selling big chunks of Chrysler and ... GMAC to a group of well-known hedgefunds and private-equity firms."

In a January interview with that newspaper, Cerberus' No. 2 executive, Mark Neporent, said the private-equity fund, which had $26 billion, never commits more than 5% of its money in any one of its funds in one investment.

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