Marchionne: Chrysler IPO may be delayed to 2012

Chrysler / Fiat CEO Sergio Marchionne
Chrysler / Fiat CEO Sergio Marchionne

Chrysler Group CEO Sergio Marchionne said today that the company’s IPO may be pushed into 2012. Earlier this year, he expected the IPO to come in the second half of this year.

“It is rational, maybe reasonable, to expect that there will be an IPO. It can’t be done very quickly,” he said. “We just filed with the SEC, we’re still working our way through the comments. We have to get ready to be a public company again, and issuing securities takes time. We should do it properly.”

The IPO is hinged upon two things; the need by Chrysler for additional liquidity, and the willingness of the UAW to divest part of its stake in the company. Fiat recently acquired a portion of the UAW’s stake, which is administered through a retiree health fund. Fiat’s stake now stands at 25%, and the UAW’s at 64%.

An even further increased stake in Chrysler is in Fiat’s plans for the immediate future, as it seeks to target emerging markets in order to offset losses in Europe. As such, Chrysler is on the verge of finalizing a South American distribution deal, with Brazil as the entry way into that market. Fiat plans to hold 51% of Chrysler by year’s end, by way of a refinancing deal for the company that proudly proclaims that its vehicles are ‘Imported From Detroit’.

– By: Stephen Calogera

Source: Automotive News