Daimler Agrees to Give Up its 19.9% Stake in Chrysler

Mercedes-Benz's parent company Daimler has reached an agreement with Cerberus to let go of its remaining 19.9% stake in Chrysler LLC and write off a $1.5 billion loan that went to the American automaker in 2007. The new agreement will help Chrysler LLC's partnership talks with the Fiat Group as it clears out the ownership problems. However, Cerberus is in a tight race with time as the U.S. government imposed deadline for the firm's restructure is April 30.

Under the new agreement between the two parties, Daimler agreed to pay US $200 million into Chrysler's pension plans for the next two years while the existing pension guaranty of US $1 billion 'vis-à-vis' the PBGC will be reduced to an amount of US $200 million and will remain in place until August 2012.