Fiat wants to buy VEBA’s stake in Chrysler as soon as possible, CEO says

Article by Andrew Christian, on February 6, 2013

Fiat SpA Chief Executive Sergio Marchionne said that the company wants the minority holder of U.S. affiliate Chrysler Group LLC to sell out as soon as possible. With regards to a United Auto Workers union retiree healthcare trust named VEBA that owns 41% of Chrysler, Marchionne commented that it would be better the faster they get it done.

In early January, Chrysler was asked by VEBA to register 16.6% of its Chrysler shares for a future public offering. This sets the stage for the automaker to trade on the stock market once more for the first time since 2007, when it was a unit of Daimler AG. Last Wednesday, Marchionne said that he will be delighted to turn any future IPO into a success.

He said that he would want Fiat to purchase VEBA's stake in Chrysler. In the past, Marchionne said that Fiat wants to buy what remains of Chrysler. Fiat presently owns 58.5% of Chrysler. According to figures that VEBA provided, the trust has to pay medical benefits to 121,624 retired Chrysler workers and their families as well as about 40,000 more in the future.

Under Chrysler's 2009 bankruptcy deal, retired Chrysler workers exchanged around $7 billion of health care and life insurance liabilities to acquire a stake in the company as well as a promissory note for $4.8 billion.

In a recent Reuters interview, UAW Vice President and Director General Holiefield said that the United Auto Workers (UAW) union is eager to see Chrysler hold an IPO. He said that he wants to see Chrysler become public again. He added that the VEBA needs to have the right amount of funding to give healthcare to its retirees.

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