Court denies Fiat bid to rule on Chrysler share value

Article by Anita Panait, on August 1, 2013

Italian carmaker Fiat SpA failed to persuade Delaware Chancery Court Judge Donald Parsons to set the value of some Chrysler Group shares held by VEBA, UAW’s retiree trust. Parsons on rejected Tuesday Fiat's request that he rule that a call-option agreement covering around 54,000 Chrysler shares valued the stock at $139 million.

Parson’s decision may mean that the case over the holdings would go on trial, thereby delaying Fiat’s plan to merge with Chrysler as soon as possible. Parsons, however, ruled in Fiat's favor on several issues that affect the value of the VEBA’s shares in the decision, which pertains only to a part of the 270,000 shares the trust received when Chrysler emerged from bankruptcy in 2009.

Parson’s ruling may further delay Fiat’s acquisition of the shares, which along with the rest of VEBA’s holdings, are vital to merging the Italian carmaker and Chrysler, creating a new entity large enough to challenge current global leaders like Toyota, General Motors and Volkswagen.

Parsons said in his 448-page decision that Fiat officials failed to show that VEBA is "is required to deliver the shares in return for Fiat's payment of $139.7 million," saying that it would premature to require the trust fund to “hand over the shares.”

Fiat is currently seeking up to $10 billion from a pool of banks to finance its planned acquisition of VEBA’s entire 41.5-percent stake in Chrysler and to refinance the carmakers' debt, people privy with the matter divulged in May.

According to the sources, the lenders include Bank of America Corp. and Goldman Sachs Group Inc. Fiat-Chrysler Chief executive Sergio Marchionne has been working to merge the carmakers to better compete against global rivals. [source: automotive news - sub. required]

If you liked the article, share on:


Login or Create new account to add a comment!


Many have been excited with the impending arrival of the next-generation Jeep Wrangler and the new 2019 Jeep Grand Wagoneer, which is slated to be the brand’s new range-topping model....
by - October 21, 2016
Chevrolet has taken the wraps off its new Chevrolet Colorado ZH2 at the fall meeting of the Association of the United States Army (AUSA). Tagged as the most extreme fuel-cell-powered...
by - October 21, 2016
Honda has unveiled the fifth generation of its hot-selling SUV – the 2017 Honda CR-V. The latest iteration of the CR-V should help it maintain its benchmark status in the...
by - October 21, 2016
Many are already expecting BMW to launch an ultra luxurious SUV that will serve at its new flagship by late 2018. Larger than the X5 and X6, the new X7...
by - October 21, 2016
Most of you may have heard or already have one of those autonomous home appliances doing the house chores. Thus, it’s not anymore unusual to see a car going places...
by - October 20, 2016