Fiat won’t risk a credit-rating downgrade to gain full ownership of Chrysler

Article by Christian Andrei, on June 15, 2011

Fiat S.p.A. isn’t willing to risk a downgrade to its credit rating to get full ownership of Chrysler Group LLC, according to CEO Sergio Marchionne. He also said that there have been no talks to acquire the stake of the United Auto Workers retiree health-care trust fund in Chrysler.

Reporters were able to talk to Marchionne last Tuesday in Gavi, Italy, during the introduction of the Fiat Freemont, a European version of the Dodge Journey sport-utility vehicle.

He said that an IPO would be the “easiest route”; however, it won’t do anything to “jeopardize” Fiat’s rating. Beginning May 24, Fiat consolidated Chrysler's results, indicating the rapid integration of the two automakers.

He explained that there’s progress in its goal to buy Canada's stake in Chrysler but it’s highly unlikely that there will be an IPO of Chrysler this year. He said that there is no market for a share sale to take place this year.

The U.S. government initially granted a 20% stake in Chrysler to Fiat, which now seeks to acquire 57% of the U.S. automaker by the end of 2011. Fiat said that by that time, the UAW trust will hold 41.5% of Chrysler.

Fiat had been put under review for a potential downgrade in its credit rating by Moody's Investors Service and Fitch Ratings in April. Standard & Poor's lowered Fiat’s long-term corporate credit rating to BB from BB+ in February after it was able to spin off its industrial operations. These two ratings fall below investment grade.

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

Did you miss the opportunity to get a brand new Dodge Viper? Well, here’s something you don’t want to miss. Dodge has announced a “final call” for orders for its...
by - December 6, 2016
Acura fans and customers rejoice! Sales have begun for the flagship model of Acura’s RLX top-of-the-range sedan – the 2017 Acura RLX Sport Hybrid. Described by Acura as its most...
by - December 6, 2016
Autonomous cars are slowly but surely gaining more appeal among drivers around the world. While a complete self-driving system has yet to be launched, carmakers have been finding ways to...
by - December 6, 2016
BMW has officially ended the production cycle for what is considered as its meanest and fastest sports car – the BMW M4 GTS. Basically a power-up evolution of the BMW...
by - December 6, 2016
Now that Lamborghini is set to bring a “more aggressive” Aventador, it only makes sense that it will be given a name. Seeing how it goes, perhaps we won’t be...
by - December 6, 2016
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