Chrysler IPO postponed until 2014 over US tax issue

Article by Anita Panait, on November 27, 2013

Chrysler Group will not hold an initial public offering this year as it needs to deal with a tax issue first in the United States, two sources privy with the process told Reuters. One of the sources said that Chrysler has already notified underwriters of the decision. Fiat issued a statement saying that it would "not be practicable" to complete a Chrysler IPO this year.

Chrysler had sought to launch the share sale in early December. The sources disclosed that plans were delayed, no thanks to complications involving the conversion of Chrysler from a limited liability company to a C corporation. According to Peter Bible, chief risk officer of accounting firm EisnerAmper, most public companies are C corporations, and conversion to this structure might mean additional taxes.

Being a limited liability corporation, Chrysler has few shareholders with its owners bearing the losses and paying the taxes. On the other hand, a C corporation pays its own taxes. It also has no limit on the number of shareholders and faces a greater tax burden.

The delay could also hamper the efforts of chief executive Sergio Marchionne to buy out the minority shareholder at Chrysler and eventually merge it with Fiat to create a company that is large enough to compete with global carmakers.

A merged Fiat-Chrysler would be the seventh-largest carmaker in the world. While Marchionne said he prefers avoiding an IPO for Chrysler, he was forced to file IPO documents in late September after failing to strike a buyout agreement with the other Chrysler owner, the VEBA trust.

Topics: chrysler, ipo

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

Although specs for the new Renault Megane had already surfaced several weeks ago, we didn’t know that the company has cooked up something new. Aside from the 200hp gasoline, Renault‘s...
by - December 9, 2016
For the first time in fifty-eight years, Infiniti registers its first US-Spec Q60 Coupe in Cuba. American products have not been allowed entry into Cuba for six decades. But it...
by - December 9, 2016
Chevrolet has already given out the pricing for some of its 2018 Equinox models. Not only will the new Equinox be available in both the US and Canada, it is...
by - December 9, 2016
Nearly all details have been set with regards to the upcoming market introduction of the new Jaguar I-Pace. Its production version was recently previewed at the 2016 Los Angeles Auto...
by - December 8, 2016
WM Motor, a new China-based automaker, recently revealed its forthcoming lineup consisting of affordable electric vehicles. While there is a company is the U.S. that has the same name, they...
by - December 8, 2016
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries