Chrysler has vowed to repay bailout loans worth more than $7-billion (R46.2-billion) given by the US and Canadian governments, moving to close a troubled chapter in the company's history.
The third biggest US carmaker said it would pay back the bailout by June with loans from investors.
“There isn't any doubt there is interest in the capital markets,” said Chrysler and Fiat chairman Sergio Marchionne, expressing confidence the firm could get the cash.
The new debt securities will be offered privately to institutional investors next Wednesday, a source familiar with the matter told AFP.
Chrysler, which is now under operational control of Italy's Fiat, needed government help to stay afloat as sales slumped in the “Great Recession”.
Treasury Secretary Timothy Geithner, after touring a company plant in Detroit on Thursday, said the government's unpopular decision to bailout Chrysler and its rival General Motors had been vindicated.
“The president made the right choice to help stabilize the motor industry,” he said.
“Today, the American automakers are growing stronger, creating new jobs, and manufacturing the fuel-efficient cars and trucks that will carry us toward an energy independent future.”
As Chrysler tries to end its government ties, the firm is bidding to become more lean and competitive in the toughly fought car market.
“Chrysler has certainly made progress from the first quarter of last year: sales are up 22.5 percent, brand awareness is up, many redesigned vehicles are in Chrysler showrooms and incentives are down,” said Edmunds.com Analyst Ivan Drury.
“However, Chrysler still depends on the sale of very large cars and trucks, and this is going to hinder their progress in the upcoming months as fuel costs escalate,” he added.
Part of Chrysler's makeover appeared to be a transfer to majority European ownership. Earlier this month Fiat took a step toward becoming one of the biggest carmakers in the world with a $1.3-billion (R8.6-billion) deal to raise its stake in Chrysler to 46 percent. The Italian carmaker said it expected to increase its stake to 51 percent “before year-end.”
Fiat took over management of the iconic US company after it emerged from bankruptcy in 2009. Chrysler suffered from an implosion of sales for the vehicle sector in the United States.
The two combined have a production volume of about four million vehicles a year, which could be increased to six million by 2014.
That would place the combined company among the top carmakers in the world.
Chrysler has continued to lose money, in part due to its heavy debt load, with high interest rates associated with the loans from the US and Canada.
The Wall Street Journal reported that refinancing may help Chrysler qualify for a low-interest loan from the US Energy Department to build more fuel-efficient vehicles. -AFP