agreement with the Securities & Exchange Commission (SEC), the
US stock market watchdog, to repay some $700 million (€556 million)
in back taxes relating to its US leasing activities between 1995
and 2000.
According to a spokesperson, the German manufacturer already
accounted for the amount in its 2008 results, and so it will not
hit profits this year; although the group will see a cash outflow
for the full amount.
Go deeper with GlobalData
To compensate for the lost liquidity, Daimler aims to sell a
portion of its Capital Services leasing portfolio in order to raise
new cash and neutralise the effect of the payment.
“Due to the current favourable interest rate conditions, we plan
to reduce the portfolio of Capital Services by a similar amount, so
the cash effect should thus be neutral,” a spokesperson for Daimler
said.
“We also profit then from the fact that we no longer have to
refinance the Capital Services portfolio,” she added.
Separately, Mercedes-Benz Bank announced last week that it would
provide over €5 billion of the refinancing Daimler needs this
year.
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By GlobalDataIt is expected that the bank will provide €2.5 billion for
Daimler’s German leasing business, and a slightly larger amount for
leasing and financing activities in the UK.
