Daimler to Drain 'Excess Liquidity'

DaimlerChrysler AG (DAI) said Monday it will reduce its excess liquidity almost completely by the end of the first quarter 2008.

"Daimler will reduce this excess liquidity due to the favorable maturity structure of bonds, bank loans and commercial papers to approximately EUR10 billion by the end of the third quarter 2007. By the end of the first quarter 2008, the remaining excess liquidity will be cut back almost completely," the company said in a statement published on its Web site.

In a statement earlier this month, DaimlerChrysler had said that "at present, net liquidity in the industrial business is approximately EUR13 billion...The use of surplus liquidity will be communicated by February 2008 at the latest. The shareholders' interests will of course be given proper consideration".

DaimlerChrysler said it's net liquidity rose through a "cash payment in the amount of the outstanding receivables" related to the recent sale of its former Chrysler Group division to private equity firm Cerberus Capital Management L.P.'s.

DaimlerChrysler shareholders are set to vote on renaming the company Daimler AG at an extraordinary shareholder meeting Oct. 4 in Berlin.