A federal bankruptcy court has given its green light to the sale of key assets of American carmaker Chrysler to Italy's Fiat, the New York Times reported on Monday.
Judge Arthur J. Gonzalez's approval of the partnership plan, which give Fiat management control, will allow the Detroit No.3 to come out of bankruptcy protection.
An official announcement is expected later on Monday.
According to the NYT, 55% of Chrysler's stock will be in the hands of a union pension fund while Fiat will initially hold a 20% stake, which will rise to 35% once Fiat meets certain benchmarks, including producing its own cars in the US at Chrysler plants.
The American and Canadian governments will also have stakes in the automaker while Fiat in the future will be able to obtain over 50% once federal loans have been repaid.
The new board at Chrysler will be chaired by former Borden Chemical and Duracell chairman C. Robert Kidder, while Fiat CEO Sergio Marchionne is expected to hold the same job at the American automaker.
Fiat is acquiring Chrysler's assets in a non-cash deal which sees it offer its cutting-edge green and small car technology, which sector experts have valued at up to $10 billion.
Also on Monday, General Motors moved to ask for bankruptcy protection which will allow it to streamline and restructure its activities and reduce debt.
Loans extended to the Detroit No.1, including an upcoming additional $30.1 billion, will make the federal government the majority shareholder, with 60%.
White House sources said the government intended to maintain a quota in GM ''no longer than necessary'' and has no intention of ''interfering in or exercising control over day-to-day business''.
The Canadian government will also have a stake in GM as will unions and creditors.
