Fiat boss rules out flotation of Chrysler unit before end of 2013

 
City A.M. Reporter
ITALIAN car-maker Fiat said yesterday that a planned initial public offering (IPO) of its US unit Chrysler will not take place this year, prolonging the uncertainty over whether it can reach a deal to buy the stake in the group it does not already own.

Yet late last night Chrysler amended its S1 filing with the Securities and Exchange Commission to say that – if it floats at some point – it will be on the New York Stock Exchange under the symbol CGC.

The IPO, which Fiat chief executive Sergio Marchionne had previously said could take place in 2013, was expected to shed light on the US car-maker’s value and help settle a long-running spat between Fiat and a healthcare trust which owns 41.5 per cent of Chrysler.

“The board of directors of Chrysler Group ... has determined that it will not be practicable for Chrysler Group to launch and complete an initial public offering prior to the end of 2013,” Fiat said.

It said it expected Chrysler to work towards an IPO in the first quarter of 2014, but added it could not say if and when such an offer would happen as it would depend on “market conditions and other relevant considerations”.

Fiat, which has a 58.5 per cent stake in Chrysler, wants to buy the rest of the US carmaker, but has not been able to agree a price with the United Auto Workers union, which owns the rest via its retirees’ healthcare trust Veba.

Investors had hoped that the preliminary work for the IPO of part of the Veba stake might have helped narrow the difference between the two sides, and that they could reach a deal without carrying out the share sale.