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

Recommended

Polestar is notably known to be Volvo's internal performance specialists, and around last year Polestar revealed to the public that it will utilize electrification to further advance the power of...
by - June 26, 2017
Earlier this month, Porsche introduced to us the 911 Turbo S Exclusive Series. The car wore a Golden Yellow Metallic paint. The same time it was launched, the company said...
by - June 26, 2017
Last month, the Lamborghini Centenario made its way to the Transformers: The Last Knight premiere where it got the attention of many. Following that event, three Lamborghini Centenario coupes landed...
by - June 26, 2017
The Holy Trinity of hypercars may not be accessible anymore after being discontinued, but that doesn’t mean we won’t see any more hypercars in the future. What we know is...
by - June 26, 2017
Kia is taking things a step further with the new Kia Stinger, which they first introduced at the 2017 Detroit Auto Show. With the specs given to us by the...
by - June 25, 2017
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