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 Italian automaker Fiat SpA, Chrysler's majority owner, said earlier
Monday that Chrysler's board has determined an initial public
offering is "not practicable" in 2013. Instead, Chrysler Group LLC
will continue work on the offering so it can happen in the first
quarter of next year, the statement said.
The shares would be traded under the symbol "CGC," Chrysler said in
a government filing.
Fiat owns 58.5 percent of Chrysler's shares, with the remaining 41.5
percent held by a United Auto Workers union trust fund that pays
health care bills for blue-collar retirees.
But Sergio Marchionne, CEO of both automakers, has been squabbling
with the trust over the price, and so far they haven't been able to
reach agreement. Marchionne wants to buy the trust's shares in order
to combine the companies.
The IPO would consist of shares currently held by the trust. Last
month, UBS AG set the value of the trust's stake at $5.6 billion.
Fiat has gone to court seeking a judgment on the price, but the
trial date is set for next September.
The pricing process for the IPO might be the stimulus needed for the
two sides to reach agreement and avoid the public sale. "I'm not
selling anything and nor do I think we need to do so," Marchionne
said in October.
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Marchionne can't spend Chrysler's cash on Fiat's operations unless
the companies merge. He has made it clear that he would prefer to
settle the dispute without an IPO, but filed the paperwork for the
offering in September at the trust's request.
But Chrysler's profits have been propping up Fiat on the balance
sheet all year as the Italian automaker struggles in a down European
market.
The Auburn Hills, Mich., automaker earned $464 million last quarter
on U.S. sales of the Ram pickup and Jeep Grand Cherokee, its
ninth-straight profitable quarter. The results boosted Fiat, which
earned $260 million in the third quarter. Without Chrysler's
contribution, Fiat would have lost $340 million.
[Associated
Press]
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