Chrysler Planning to File Initial Public Offering This Week

ChryslerChryslerUnited States of America, 1925 > present70 models
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says that it plans to file an initial public stock offering this week in the United States. The IPO may raise the company’s price and make it more expensive for FiatFiatItaly, 1899 > present159 models
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to buy the remaining stock in the company.

Over 90% of Chrysler’s stock is held by VEBA, the healthcare pension for the United Auto Workers labor union, and Fiat. The two sides have reached a stalemate on selling further shares of the company since a Delaware judge decided that the share price that Fiat was asking from VEBA was too low and VEBA’s proposed share price was too high. Putting the company on the public stock exchange would conceivably show both companies how much the stock is actually worth.

"We need to go trough this process of determining value," he said. "[VEBA] have been very clear that they are not long-term holders of the assets. They want to monetize so we need to find a way that ... does not create what I consider to be exceptionally high or abnormal expectations of value," said Fiat CEO Sergio Marchionne.

Both sides are taking a gamble with the IPO. Both sides could get a worse price than they had hoped depending on how the market values Chrysler.

According to Marchionne, the actual listing will likely not happen until the very end of 2013 or early 2014. 

Source: Automotive News Europe