Fiat CEO hopes VEBA will sell its Chrysler stake as soon as possible

Article by Eugene Conan, on February 1, 2013

Fiat chief executive Sergio Marchionne hopes that the Voluntary Employees' Beneficiary Association (VEBA), UAW retiree healthcare trust that holds a 41-percent stake in Chrysler Group LLC, would sell its holdings in the unit as soon as possible. Marchionne said that the faster the stake sale is done, the better it is.

VEBA asked Chrysler earlier this month to register 16.6 percent of its shares in the US carmaker for a future public offering, thereby building a platform from which Chrysler could publicly trade its shares in the stock market for the first time since 2007.

According to Marchionne, he would be "more than happy" to work on a successful initial public offering. He, however, said that he would prefer that Fiat will acquire VEBA’s holdings in Chrysler. Marchionne has been indicating that the Italian carmaker is interested to acquire the shares in Chrysler that it still does not own.

Fiat holds a 58.5-percent stake in Chrysler. According to figures provided by the VEBA, it needs to pay medical benefits to 121,624 retired Chrysler workers and their families, and another 40,000 employees in the future.

As part of Chrysler's bankruptcy agreement in 2009, retired Chrysler workers swapped around $7 billion of health care and life insurance liabilities for ownership in the carmaker and a promissory note for $4.8 billion. UAW Vice President and Director General Holiefield told Reuters in a recent interview remarked that the union wants to see Chrysler hold an IPO, adding that VEBA needs the right amount of finances to provide healthcare for its member retirees.

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