Bo Peng

Chrysler: Reshuffle the Corporate Capital Structure?

Thanks for the info, car_guy.

When you invest in a company, your valuation is based on all-in cost. So whether Fiat put the $2B cash upfront or later doesn't change the valuation. I think the $10B ballpark valuation for Chrysler still stands.

As to UAW's recovery, it's recovery for its "investment" in this deal, not its overall VEBA liability. So I think 55% recovery is correct. I'm not sure it was smart for UAW to accept the conversion of their junior debt into equity, though. It does carry a lot of risk. And now they're on the hook to lower their demand in contract negotiations. It's a no win situation for them.