Chrysler Group LLC is prepared to submit documents for its initial public offering this week, chief executive Sergio Marchionne was quoted by the Financial Times as saying. Marchionne, who is also CEO of Chrysler parent Fiat, disclosed that “all the work, all the preparation, drafts have gone through” and the carmaker should be ready to file IPO documents within the third week of September.
Marchionne said last Friday that he did not think that an agreement to acquire Chrysler stake that Fiat does not already have is still far off. The stake is owned by UAW’s healthcare trust VEBA. Marchionne had intended to buy out the stake in Chrysler and merge the US carmaker with Fiat, thereby creating seventh-largest auto group in the world.
Marchionne was quoted as saying by the FT that an IPO would delay efforts to combine Fiat and Chrysler. Discussions to acquire VEBA's 41.5-percent holdings in Chrysler have stalled since Marchionne believes the healthcare trust's price values the US carmaker at more than it is worth.
Sans any agreement, VEBA intends to sell a part of its stake in an IPO, and divest the rest in stages over time. In January 2013, VEBA exercised a legal right to demand that 16.6 percent of Chrysler be listed. The listing could occur this year, the FT said.
Marchionne told the FT that there is a need to determine the stakes’ value, as VEBA has been clear that it is not a long-term stakeholder at Chrysler. He remarked that since VEBA want to “monetize,” Fiat has to find a way that the determination would not lead to what he considers as “exceptionally high or abnormal expectations of value." In court documents, Fiat valued Chrysler at $4.2 billion, while VEBA valued that carmaker to be as much as $10.3 billion.