Chrysler clarifies: Fiat would not assume its debt

Chrysler LLC said on Friday proposed partner Fiat SpA would not assume any of its debt if it takes an equity stake in the U.S. automaker.

The comments came a day after Chrysler said Fiat would assume 35 percent of its debt to the U.S. government. The Italian automaker flatly denied such a deal.

As a potential result of the ongoing discussions taking place related to the Fiat alliance, Fiat would become an equity holder with the same rights and responsibilities as all other equity holders in a newly restructured company, Chrysler said in a statement.

To clarify, this does not mean Fiat would assume responsibility for any of Chrysler LLC's debt.

The No. 3 U.S. automaker has a nonbinding deal with Italian automaker Fiat, which has agreed to take a 35 percent stake in Chrysler in exchange for access to technology and overseas markets.

Under the terms of the deal, Fiat will not pay cash for the stake in Chrysler, which is 80.1 percent controlled by Cerberus Capital Management .

(Reporting by Soyoung Kim and David Bailey, editing by Matthew Lewis)