Cerberus defends not spending more on Chrysler
March 3, 2009 by Matt Brogan
Cerberus Capital Management, the private-equity fund that owns 80.1 percent of Chrysler, says it wants more federal loans for Chrysler LLC in order to avoid excessive risk-taking such that contributed to Wall Street’s demise.
At the same time the group defended its position of not outlaying any more of its own money saying it intends to protect its investors through rules that limit how much capital it can commit to an individual company.
“Why should these retirees, universities and charities, simply because they are represented by a private investment manager, be required to take additional risks or make additional investments, when GM or Ford shareholders are not?” Mark Neporent, COO of Cerberus said in a statement.
But some critics of the group’s restructuring plan have questioned this statement saying that contributing its own funds to save a shareholder owned company is exactly what private equity funds, like Cerberus, are supposed to do.
Neporent reiterated Cerberus’ willingness to surrender its equity stake in Chrysler Automotive, convert debt to equity and put $2 billion in other Chrysler interests on a lower priority behind the government’s loans.
The request for an additional $5 billion in federal loans comes on top of the $4 billion it has already received.
Cerberus took control of Chrysler in August 2007.
Print it: 
Everyone knows their cars are rubbish and noone wants to risk their money. So its the tax payers that will burn their money away without a say…I can smell a Mike Moore film soon.
How can Cerberus be expected to put in more money when they have to pay out bonuses like the ones to GMAC (of which Cerberus owns roughly half) Executives even when the company is failing????
Would I be wrong in suggesting that many so called Capital Management ‘organisations’ make their money by acquiring companies, stripping the assets, reducing development/future investment and generally displaying greed without a ‘real’ interest for that particular companies long term future??
I believe SOME of these capital management companies are as responsible for the demise of many companies globally
GM seems to be swallowing in debt multiple times its value but Chrysler seems to be going nowhere. Fiat may keep it alive but for how long?
Remember rover , bought by BMW , sold to a privateer , went down the shooter big time .
remember chrysler , bought by daimler benz , sold to a privateer , went down ########## .
dejavu